Correlation Between Barrick Gold and Comstock Holding

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

Diversification Opportunities for Barrick Gold and Comstock Holding

0.88
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Barrick and Comstock is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold Corp and Comstock Holding Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comstock Holding Com 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 Comstock Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comstock Holding Com has no effect on the direction of Barrick Gold i.e., Barrick Gold and Comstock Holding go up and down completely randomly.

Pair Corralation between Barrick Gold and Comstock Holding

Given the investment horizon of 90 days Barrick Gold Corp is expected to under-perform the Comstock Holding. But the stock apears to be less risky and, when comparing its historical volatility, Barrick Gold Corp is 1.96 times less risky than Comstock Holding. The stock trades about -0.01 of its potential returns per unit of risk. The Comstock Holding Companies is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  405.00  in Comstock Holding Companies on October 4, 2024 and sell it today you would earn a total of  403.00  from holding Comstock Holding Companies or generate 99.51% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Barrick Gold Corp  vs.  Comstock Holding Companies

 Performance 
       Timeline  
Barrick Gold Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
Comstock Holding Com 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Comstock Holding Companies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Barrick Gold and Comstock Holding Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Barrick Gold and Comstock Holding

The main advantage of trading using opposite Barrick Gold and Comstock Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrick Gold position performs unexpectedly, Comstock Holding 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 Comstock Holding will offset losses from the drop in Comstock Holding's long position.
The idea behind Barrick Gold Corp and Comstock Holding Companies 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.

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