Correlation Between Dolphin Entertainment and Barrick Gold

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

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

Diversification Opportunities for Dolphin Entertainment and Barrick Gold

0.65

Correlation Coefficient

Dolphin Entertainment  Barrick Gold

Poor diversification

The 3 months correlation between Dolphin and Barrick is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Dolphin Entertainment 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 Dolphin Entertainment 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 Dolphin Entertainment 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 Dolphin Entertainment i.e., Dolphin Entertainment and Barrick Gold go up and down completely randomly.

Pair Corralation between Dolphin Entertainment and Barrick Gold

Given the investment horizon of 90 days Dolphin Entertainment is expected to under-perform the Barrick Gold. In addition to that, Dolphin Entertainment is 2.19 times more volatile than Barrick Gold Corp. It trades about -0.08 of its total potential returns per unit of risk. Barrick Gold Corp is currently generating about -0.11 per unit of volatility. If you would invest  2,019  in Barrick Gold Corp on August 30, 2024 and sell it today you would lose (262.00) from holding Barrick Gold Corp or give up 12.98% of portfolio value over 90 days.

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

Dolphin Entertainment  vs.  Barrick Gold Corp

Dolphin Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dolphin Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Barrick Gold Corp

Risk-Adjusted Performance

0 of 100

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 unfluctuating performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Dolphin Entertainment and Barrick Gold

The main advantage of trading using opposite Dolphin Entertainment and Barrick Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dolphin Entertainment 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 Dolphin Entertainment 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.