Correlation Between SPTSX Dividend and Barrick Gold

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

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

Diversification Opportunities for SPTSX Dividend and Barrick Gold

0.64

Correlation Coefficient

SPTSX Dividend  Barrick Gold

Poor diversification

The 3 months correlation between SPTSX and Barrick is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding SPTSX Dividend Aristocrats 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 SPTSX Dividend 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 SPTSX Dividend Aristocrats 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 SPTSX Dividend i.e., SPTSX Dividend and Barrick Gold go up and down completely randomly.

Pair Corralation between SPTSX Dividend and Barrick Gold

Assuming the 90 days trading horizon SPTSX Dividend is expected to generate 1.31 times less return on investment than Barrick Gold. But when comparing it to its historical volatility, SPTSX Dividend Aristocrats is 5.52 times less risky than Barrick Gold. It trades about 0.39 of its potential returns per unit of risk. Barrick Gold Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  2,680  in Barrick Gold Corp on April 24, 2025 and sell it today you would earn a total of  278.00  from holding Barrick Gold Corp or generate 10.37% return on investment over 90 days.

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

SPTSX Dividend Aristocrats  vs.  Barrick Gold Corp

Pair Trading with SPTSX Dividend and Barrick Gold

The main advantage of trading using opposite SPTSX Dividend and Barrick Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPTSX Dividend 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 SPTSX Dividend Aristocrats 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.