Correlation Between Barrick Gold and GEN Restaurant

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

Diversification Opportunities for Barrick Gold and GEN Restaurant

-0.72

Correlation Coefficient

Barrick Gold  GEN Restaurant

Pay attention - limited upside

The 3 months correlation between Barrick and GEN is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold Corp and GEN Restaurant Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEN Restaurant Group, 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 GEN Restaurant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEN Restaurant Group, has no effect on the direction of Barrick Gold i.e., Barrick Gold and GEN Restaurant go up and down completely randomly.

Pair Corralation between Barrick Gold and GEN Restaurant

Given the investment horizon of 90 days Barrick Gold Corp is expected to generate 0.41 times more return on investment than GEN Restaurant. However, Barrick Gold Corp is 2.42 times less risky than GEN Restaurant. It trades about 0.21 of its potential returns per unit of risk. GEN Restaurant Group, is currently generating about -0.05 per unit of risk. If you would invest  1,542  in Barrick Gold Corp on December 18, 2024 and sell it today you would earn a total of  376.00  from holding Barrick Gold Corp or generate 24.38% return on investment over 90 days.

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

Barrick Gold Corp  vs.  GEN Restaurant Group,

Barrick Gold Corp

Risk-Adjusted Performance

Good

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.

GEN Restaurant Group,

Risk-Adjusted Performance

Very Weak

Over the last 90 days GEN Restaurant Group, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Barrick Gold and GEN Restaurant

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

The idea behind Barrick Gold Corp and GEN Restaurant Group, 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.