Correlation Between Barrick Gold and Marchex

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

Diversification Opportunities for Barrick Gold and Marchex

-0.36

Correlation Coefficient

Barrick Gold  Marchex

Very good diversification

The 3 months correlation between Barrick and Marchex is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold Corp and Marchex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marchex 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 Marchex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marchex has no effect on the direction of Barrick Gold i.e., Barrick Gold and Marchex go up and down completely randomly.

Pair Corralation between Barrick Gold and Marchex

Given the investment horizon of 90 days Barrick Gold is expected to generate 18.0 times less return on investment than Marchex. But when comparing it to its historical volatility, Barrick Gold Corp is 1.84 times less risky than Marchex. It trades about 0.0 of its potential returns per unit of risk. Marchex is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  210.00  in Marchex on October 1, 2024 and sell it today you would lose (22.00) from holding Marchex or give up 10.48% of portfolio value over 90 days.

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

Barrick Gold Corp  vs.  Marchex

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.

Marchex

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Marchex are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating technical indicators, Marchex may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Barrick Gold and Marchex

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

The idea behind Barrick Gold Corp and Marchex 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.