Correlation Between Broadwind Energy and Barrick Mining

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

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

Diversification Opportunities for Broadwind Energy and Barrick Mining

0.6

Correlation Coefficient

Broadwind Energy  Barrick Mining

Poor diversification

The 3 months correlation between Broadwind and Barrick is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Broadwind Energy and Barrick Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barrick Mining and Broadwind Energy 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 Broadwind Energy are associated (or correlated) with Barrick Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barrick Mining has no effect on the direction of Broadwind Energy i.e., Broadwind Energy and Barrick Mining go up and down completely randomly.

Pair Corralation between Broadwind Energy and Barrick Mining

Given the investment horizon of 90 days Broadwind Energy is expected to generate 2.62 times more return on investment than Barrick Mining. However, Broadwind Energy is 2.62 times more volatile than Barrick Mining. It trades about 0.22 of its potential returns per unit of risk. Barrick Mining is currently generating about 0.1 per unit of risk. If you would invest  150.00  in Broadwind Energy on May 6, 2025 and sell it today you would earn a total of  128.00  from holding Broadwind Energy or generate 85.33% return on investment over 90 days.

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

Broadwind Energy  vs.  Barrick Mining

Broadwind Energy

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Broadwind Energy are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady technical and fundamental indicators, Broadwind Energy displayed solid returns over the last few months and may actually be approaching a breakup point.

Barrick Mining

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Barrick Mining are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady fundamental drivers, Barrick Mining may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Broadwind Energy and Barrick Mining

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

The idea behind Broadwind Energy and Barrick Mining 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.