Correlation Between Barrick Gold and Quebec Precious

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

Diversification Opportunities for Barrick Gold and Quebec Precious

-0.16

Correlation Coefficient

Barrick Gold  Quebec Precious

Good diversification

The 3 months correlation between Barrick and Quebec is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold Corp and Quebec Precious Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quebec Precious Metals 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 Quebec Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quebec Precious Metals has no effect on the direction of Barrick Gold i.e., Barrick Gold and Quebec Precious go up and down completely randomly.

Pair Corralation between Barrick Gold and Quebec Precious

Assuming the 90 days trading horizon Barrick Gold Corp is expected to generate 0.24 times more return on investment than Quebec Precious. However, Barrick Gold Corp is 4.09 times less risky than Quebec Precious. It trades about 0.06 of its potential returns per unit of risk. Quebec Precious Metals is currently generating about -0.02 per unit of risk. If you would invest  2,029  in Barrick Gold Corp on January 24, 2024 and sell it today you would earn a total of  324.00  from holding Barrick Gold Corp or generate 15.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.61%
Values	Daily Returns

Barrick Gold Corp  vs.  Quebec Precious Metals

Barrick Gold Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Barrick Gold Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Barrick Gold displayed solid returns over the last few months and may actually be approaching a breakup point.

Quebec Precious Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quebec Precious Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in May 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Barrick Gold and Quebec Precious

The main advantage of trading using opposite Barrick Gold and Quebec Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrick Gold position performs unexpectedly, Quebec Precious 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 Quebec Precious will offset losses from the drop in Quebec Precious' long position.

The idea behind Barrick Gold Corp and Quebec Precious Metals 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.