Correlation Between Barrick Mining and GMS

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

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

Diversification Opportunities for Barrick Mining and GMS

0.66

Correlation Coefficient

Barrick Mining  GMS

Poor diversification

The 3 months correlation between Barrick and GMS is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Mining and GMS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMS Inc and Barrick Mining 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 Mining are associated (or correlated) with GMS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GMS Inc has no effect on the direction of Barrick Mining i.e., Barrick Mining and GMS go up and down completely randomly.

Pair Corralation between Barrick Mining and GMS

Taking into account the 90-day investment horizon Barrick Mining is expected to generate 2.81 times less return on investment than GMS. But when comparing it to its historical volatility, Barrick Mining is 1.94 times less risky than GMS. It trades about 0.12 of its potential returns per unit of risk. GMS Inc is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  7,412  in GMS Inc on May 5, 2025 and sell it today you would earn a total of  3,549  from holding GMS Inc or generate 47.88% return on investment over 90 days.

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

Barrick Mining  vs.  GMS Inc

Barrick Mining

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Barrick Mining are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady fundamental drivers, Barrick Mining sustained solid returns over the last few months and may actually be approaching a breakup point.

GMS Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GMS Inc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent primary indicators, GMS unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Barrick Mining and GMS

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

The idea behind Barrick Mining and GMS Inc 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.