Correlation Between Barrick Gold and ReAlpha Tech

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

Diversification Opportunities for Barrick Gold and ReAlpha Tech

0.6

Correlation Coefficient

Barrick Gold  ReAlpha Tech

Poor diversification

The 3 months correlation between Barrick and ReAlpha is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold Corp and reAlpha Tech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on reAlpha Tech 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 ReAlpha Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of reAlpha Tech Corp has no effect on the direction of Barrick Gold i.e., Barrick Gold and ReAlpha Tech go up and down completely randomly.

Pair Corralation between Barrick Gold and ReAlpha Tech

Given the investment horizon of 90 days Barrick Gold Corp is expected to under-perform the ReAlpha Tech. But the stock apears to be less risky and, when comparing its historical volatility, Barrick Gold Corp is 1.86 times less risky than ReAlpha Tech. The stock trades about -0.14 of its potential returns per unit of risk. The reAlpha Tech Corp is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  141.00  in reAlpha Tech Corp on September 14, 2024 and sell it today you would lose (21.00) from holding reAlpha Tech Corp or give up 14.89% of portfolio value over 90 days.

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

Barrick Gold Corp  vs.  reAlpha Tech Corp

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 January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

reAlpha Tech Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days reAlpha Tech Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Barrick Gold and ReAlpha Tech

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

The idea behind Barrick Gold Corp and reAlpha Tech 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.