Correlation Between Barrick Gold and Orea Mining

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

Diversification Opportunities for Barrick Gold and Orea Mining

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Barrick and Orea is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold Corp and Orea Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orea Mining Corp 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 Orea Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orea Mining Corp has no effect on the direction of Barrick Gold i.e., Barrick Gold and Orea Mining go up and down completely randomly.

Pair Corralation between Barrick Gold and Orea Mining

If you would invest  1,441  in Barrick Gold Corp on December 29, 2023 and sell it today you would earn a total of  180.00  from holding Barrick Gold Corp or generate 12.49% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Barrick Gold Corp  vs.  Orea Mining Corp

 Performance 
       Timeline  
Barrick Gold Corp 

Risk-Adjusted Performance

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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 unsteady 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.
Orea Mining Corp 

Risk-Adjusted Performance

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Over the last 90 days Orea Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Orea Mining is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Barrick Gold and Orea Mining Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Barrick Gold and Orea Mining

The main advantage of trading using opposite Barrick Gold and Orea Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrick Gold position performs unexpectedly, Orea Mining 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 Orea Mining will offset losses from the drop in Orea Mining's long position.
The idea behind Barrick Gold Corp and Orea Mining Corp 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.

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