Correlation Between Assurant and Barrick Gold

Can any of the company-specific risk be diversified away by investing in both Assurant and Barrick 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 Assurant and Barrick Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Assurant and Barrick Gold Corp, you can compare the effects of market volatilities on Assurant and Barrick 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 Assurant with a short position of Barrick Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Assurant and Barrick Gold.

Diversification Opportunities for Assurant and Barrick Gold

-0.19

Correlation Coefficient

Assurant  Barrick Gold

Good diversification

The 3 months correlation between Assurant and Barrick is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Assurant and Barrick Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barrick Gold Corp and Assurant 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 Assurant are associated (or correlated) with Barrick Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barrick Gold Corp has no effect on the direction of Assurant i.e., Assurant and Barrick Gold go up and down completely randomly.

Pair Corralation between Assurant and Barrick Gold

Considering the 90-day investment horizon Assurant is expected to under-perform the Barrick Gold. But the stock apears to be less risky and, when comparing its historical volatility, Assurant is 1.3 times less risky than Barrick Gold. The stock trades about -0.02 of its potential returns per unit of risk. The Barrick Gold Corp is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  1,537  in Barrick Gold Corp on December 28, 2024 and sell it today you would earn a total of  377.00  from holding Barrick Gold Corp or generate 24.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Assurant  vs.  Barrick Gold Corp

Assurant

Risk-Adjusted Performance

Very Weak

Over the last 90 days Assurant has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, Assurant is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Barrick Gold Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Barrick Gold Corp are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating essential indicators, Barrick Gold exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Assurant and Barrick Gold

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

The idea behind Assurant and Barrick Gold 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.