Correlation Between Barrick Gold and 91159HHW3

Can any of the company-specific risk be diversified away by investing in both Barrick Gold and 91159HHW3 at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Barrick Gold and 91159HHW3 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Barrick Gold Corp and US BANCORP, you can compare the effects of market volatilities on Barrick Gold and 91159HHW3 and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Barrick Gold with a short position of 91159HHW3. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrick Gold and 91159HHW3.

Diversification Opportunities for Barrick Gold and 91159HHW3

0.79

Correlation Coefficient

Barrick Gold  91159HHW3

Poor diversification

The 3 months correlation between Barrick and 91159HHW3 is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold Corp and US BANCORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US BANCORP and Barrick Gold is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Barrick Gold Corp are associated (or correlated) with 91159HHW3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US BANCORP has no effect on the direction of Barrick Gold i.e., Barrick Gold and 91159HHW3 go up and down completely randomly.

Pair Corralation between Barrick Gold and 91159HHW3

Given the investment horizon of 90 days Barrick Gold Corp is expected to under-perform the 91159HHW3. In addition to that, Barrick Gold is 1.62 times more volatile than US BANCORP. It trades about -0.07 of its total potential returns per unit of risk. US BANCORP is currently generating about -0.08 per unit of volatility. If you would invest  9,490  in US BANCORP on September 5, 2024 and sell it today you would lose (546.00) from holding US BANCORP or give up 5.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Barrick Gold Corp  vs.  US BANCORP

Barrick Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Barrick Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's essential indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

US BANCORP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days US BANCORP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 91159HHW3 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Barrick Gold and 91159HHW3

The main advantage of trading using opposite Barrick Gold and 91159HHW3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrick Gold position performs unexpectedly, 91159HHW3 can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in 91159HHW3 will offset losses from the drop in 91159HHW3's long position.

The idea behind Barrick Gold Corp and US BANCORP pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.