Correlation Between Barrick Gold and SilverBox Corp

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

Diversification Opportunities for Barrick Gold and SilverBox Corp

0.04

Correlation Coefficient

Barrick Gold  SilverBox Corp

Significant diversification

The 3 months correlation between Barrick and SilverBox is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold Corp and SilverBox Corp IV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SilverBox Corp IV 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 SilverBox Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SilverBox Corp IV has no effect on the direction of Barrick Gold i.e., Barrick Gold and SilverBox Corp go up and down completely randomly.

Pair Corralation between Barrick Gold and SilverBox Corp

Given the investment horizon of 90 days Barrick Gold Corp is expected to under-perform the SilverBox Corp. In addition to that, Barrick Gold is 9.59 times more volatile than SilverBox Corp IV. It trades about -0.41 of its total potential returns per unit of risk. SilverBox Corp IV is currently generating about 0.15 per unit of volatility. If you would invest  1,003  in SilverBox Corp IV on September 23, 2024 and sell it today you would earn a total of  6.00  from holding SilverBox Corp IV or generate 0.6% return on investment over 90 days.

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

Barrick Gold Corp  vs.  SilverBox Corp IV

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.

SilverBox Corp IV

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SilverBox Corp IV are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, SilverBox Corp is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Barrick Gold and SilverBox Corp

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

The idea behind Barrick Gold Corp and SilverBox Corp IV 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 Stocks Directory module to find actively traded stocks across global markets.