Correlation Between Elfun Trusts and BARRICK

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

By analyzing existing cross correlation between Elfun Trusts Elfun and BARRICK NORTH AMER, you can compare the effects of market volatilities on Elfun Trusts and BARRICK 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 Elfun Trusts with a short position of BARRICK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Trusts and BARRICK.

Diversification Opportunities for Elfun Trusts and BARRICK

-0.63

Correlation Coefficient

Elfun Trusts  BARRICK

Excellent diversification

The 3 months correlation between Elfun and BARRICK is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Trusts Elfun and BARRICK NORTH AMER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BARRICK NORTH AMER and Elfun Trusts 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 Elfun Trusts Elfun are associated (or correlated) with BARRICK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BARRICK NORTH AMER has no effect on the direction of Elfun Trusts i.e., Elfun Trusts and BARRICK go up and down completely randomly.

Pair Corralation between Elfun Trusts and BARRICK

Assuming the 90 days horizon Elfun Trusts is expected to generate 1.24 times less return on investment than BARRICK. But when comparing it to its historical volatility, Elfun Trusts Elfun is 7.97 times less risky than BARRICK. It trades about 0.34 of its potential returns per unit of risk. BARRICK NORTH AMER is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  10,025  in BARRICK NORTH AMER on September 18, 2024 and sell it today you would earn a total of  227.00  from holding BARRICK NORTH AMER or generate 2.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	85.0%
Values	Daily Returns

Elfun Trusts Elfun  vs.  BARRICK NORTH AMER

Elfun Trusts Elfun

Risk-Adjusted Performance

12 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Elfun Trusts Elfun are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Elfun Trusts may actually be approaching a critical reversion point that can send shares even higher in January 2025.

BARRICK NORTH AMER

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BARRICK NORTH AMER has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, BARRICK is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Elfun Trusts and BARRICK

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

The idea behind Elfun Trusts Elfun and BARRICK NORTH AMER 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.