Correlation Between Barrick Gold and Where Food

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Can any of the company-specific risk be diversified away by investing in both Barrick Gold and Where Food 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 Where Food 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 Where Food Comes, you can compare the effects of market volatilities on Barrick Gold and Where Food 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 Where Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrick Gold and Where Food.

Diversification Opportunities for Barrick Gold and Where Food

-0.51
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Barrick and Where is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold Corp and Where Food Comes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Where Food Comes 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 Where Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Where Food Comes has no effect on the direction of Barrick Gold i.e., Barrick Gold and Where Food go up and down completely randomly.

Pair Corralation between Barrick Gold and Where Food

Given the investment horizon of 90 days Barrick Gold Corp is expected to under-perform the Where Food. In addition to that, Barrick Gold is 1.05 times more volatile than Where Food Comes. It trades about -0.07 of its total potential returns per unit of risk. Where Food Comes is currently generating about 0.14 per unit of volatility. If you would invest  1,115  in Where Food Comes on September 5, 2024 and sell it today you would earn a total of  185.00  from holding Where Food Comes or generate 16.59% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Barrick Gold Corp  vs.  Where Food Comes

 Performance 
       Timeline  
Barrick Gold Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.
Where Food Comes 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Where Food Comes are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Where Food reported solid returns over the last few months and may actually be approaching a breakup point.

Barrick Gold and Where Food Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Barrick Gold and Where Food

The main advantage of trading using opposite Barrick Gold and Where Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrick Gold position performs unexpectedly, Where Food 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 Where Food will offset losses from the drop in Where Food's long position.
The idea behind Barrick Gold Corp and Where Food Comes 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.
Check out your portfolio center.
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

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