Correlation Between Barrick Gold and Griffon

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

Diversification Opportunities for Barrick Gold and Griffon

-0.26

Correlation Coefficient

Barrick Gold  Griffon

Very good diversification

The 3 months correlation between Barrick and Griffon is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold Corp and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon 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 Griffon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Griffon has no effect on the direction of Barrick Gold i.e., Barrick Gold and Griffon go up and down completely randomly.

Pair Corralation between Barrick Gold and Griffon

Given the investment horizon of 90 days Barrick Gold Corp is expected to generate 0.87 times more return on investment than Griffon. However, Barrick Gold Corp is 1.15 times less risky than Griffon. It trades about 0.23 of its potential returns per unit of risk. Griffon is currently generating about 0.02 per unit of risk. If you would invest  1,537  in Barrick Gold Corp on December 29, 2024 and sell it today you would earn a total of  419.00  from holding Barrick Gold Corp or generate 27.26% return on investment over 90 days.

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

Barrick Gold Corp  vs.  Griffon

Barrick Gold Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Barrick Gold Corp are ranked lower than 17 (%) 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.

Griffon

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Griffon are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Griffon is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Barrick Gold and Griffon

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

The idea behind Barrick Gold Corp and Griffon 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.