Correlation Between Barrick Gold and Lincoln Gold
Can any of the company-specific risk be diversified away by investing in both Barrick Gold and Lincoln Gold 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 Lincoln Gold 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 Lincoln Gold Mining, you can compare the effects of market volatilities on Barrick Gold and Lincoln Gold 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 Lincoln Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrick Gold and Lincoln Gold.
Diversification Opportunities for Barrick Gold and Lincoln Gold
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Barrick and Lincoln is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold Corp and Lincoln Gold Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lincoln Gold Mining 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 Lincoln Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lincoln Gold Mining has no effect on the direction of Barrick Gold i.e., Barrick Gold and Lincoln Gold go up and down completely randomly.
Pair Corralation between Barrick Gold and Lincoln Gold
If you would invest 8.30 in Lincoln Gold Mining on February 1, 2024 and sell it today you would earn a total of 0.00 from holding Lincoln Gold Mining or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Barrick Gold Corp vs. Lincoln Gold Mining
Performance |
Timeline |
Barrick Gold Corp |
Lincoln Gold Mining |
Barrick Gold and Lincoln Gold Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Barrick Gold and Lincoln Gold
The main advantage of trading using opposite Barrick Gold and Lincoln Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrick Gold position performs unexpectedly, Lincoln Gold 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 Lincoln Gold will offset losses from the drop in Lincoln Gold's long position.Barrick Gold vs. Agnico Eagle Mines | Barrick Gold vs. Pan American Silver | Barrick Gold vs. Wheaton Precious Metals | Barrick Gold vs. Kinross Gold |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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