Correlation Between 00108WAK6 and Barrick Gold

Can any of the company-specific risk be diversified away by investing in both 00108WAK6 and Barrick Gold 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 00108WAK6 and Barrick Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AEP Texas 345 and Barrick Gold Corp, you can compare the effects of market volatilities on 00108WAK6 and Barrick Gold 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 00108WAK6 with a short position of Barrick Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of 00108WAK6 and Barrick Gold.

Diversification Opportunities for 00108WAK6 and Barrick Gold

0.74

Correlation Coefficient

00108WAK6  Barrick Gold

Poor diversification

The 3 months correlation between 00108WAK6 and Barrick is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding AEP Texas 345 and Barrick Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barrick Gold Corp and 00108WAK6 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 AEP Texas 345 are associated (or correlated) with Barrick Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barrick Gold Corp has no effect on the direction of 00108WAK6 i.e., 00108WAK6 and Barrick Gold go up and down completely randomly.

Pair Corralation between 00108WAK6 and Barrick Gold

Assuming the 90 days trading horizon AEP Texas 345 is expected to generate 0.54 times more return on investment than Barrick Gold. However, AEP Texas 345 is 1.87 times less risky than Barrick Gold. It trades about 0.0 of its potential returns per unit of risk. Barrick Gold Corp is currently generating about -0.18 per unit of risk. If you would invest  6,876  in AEP Texas 345 on October 26, 2024 and sell it today you would lose (27.00) from holding AEP Texas 345 or give up 0.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	78.33%
Values	Daily Returns

AEP Texas 345  vs.  Barrick Gold Corp

AEP Texas 345

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AEP Texas 345 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 00108WAK6 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

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

Pair Trading with 00108WAK6 and Barrick Gold

The main advantage of trading using opposite 00108WAK6 and Barrick Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 00108WAK6 position performs unexpectedly, Barrick Gold 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 Barrick Gold will offset losses from the drop in Barrick Gold's long position.

The idea behind AEP Texas 345 and Barrick Gold Corp 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.