Correlation Between Freeport McMoran and Barrick Mining

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

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

Diversification Opportunities for Freeport McMoran and Barrick Mining

0.79

Correlation Coefficient

Freeport McMoran  Barrick Mining

Poor diversification

The 3 months correlation between Freeport and Barrick is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Freeport McMoran Copper Gold and Barrick Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barrick Mining and Freeport McMoran 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 Freeport McMoran Copper Gold 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 Freeport McMoran i.e., Freeport McMoran and Barrick Mining go up and down completely randomly.

Pair Corralation between Freeport McMoran and Barrick Mining

Considering the 90-day investment horizon Freeport McMoran is expected to generate 1.73 times less return on investment than Barrick Mining. In addition to that, Freeport McMoran is 1.17 times more volatile than Barrick Mining. It trades about 0.06 of its total potential returns per unit of risk. Barrick Mining is currently generating about 0.12 per unit of volatility. If you would invest  1,854  in Barrick Mining on May 5, 2025 and sell it today you would earn a total of  283.00  from holding Barrick Mining or generate 15.26% return on investment over 90 days.

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

Freeport McMoran Copper Gold  vs.  Barrick Mining

Freeport McMoran Copper

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Freeport McMoran Copper Gold are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile fundamental indicators, Freeport McMoran may actually be approaching a critical reversion point that can send shares even higher in September 2025.

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.

Pair Trading with Freeport McMoran and Barrick Mining

The main advantage of trading using opposite Freeport McMoran and Barrick Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freeport McMoran 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 Freeport McMoran Copper Gold 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.