Correlation Between Empire Metals and Fremont Gold
Can any of the company-specific risk be diversified away by investing in both Empire Metals and Fremont 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 Empire Metals and Fremont Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empire Metals Corp and Fremont Gold, you can compare the effects of market volatilities on Empire Metals and Fremont 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 Empire Metals with a short position of Fremont Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire Metals and Fremont Gold.
Diversification Opportunities for Empire Metals and Fremont Gold
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Empire and Fremont is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Empire Metals Corp and Fremont Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fremont Gold and Empire Metals 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 Empire Metals Corp are associated (or correlated) with Fremont Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fremont Gold has no effect on the direction of Empire Metals i.e., Empire Metals and Fremont Gold go up and down completely randomly.
Pair Corralation between Empire Metals and Fremont Gold
Given the investment horizon of 90 days Empire Metals Corp is expected to generate 3.25 times more return on investment than Fremont Gold. However, Empire Metals is 3.25 times more volatile than Fremont Gold. It trades about 0.1 of its potential returns per unit of risk. Fremont Gold is currently generating about 0.05 per unit of risk. If you would invest 7.00 in Empire Metals Corp on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Empire Metals Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Empire Metals Corp vs. Fremont Gold
Performance |
| Timeline |
| Empire Metals Corp |
| Fremont Gold |
Empire Metals and Fremont Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire Metals and Fremont Gold
The main advantage of trading using opposite Empire Metals and Fremont Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire Metals position performs unexpectedly, Fremont 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 Fremont Gold will offset losses from the drop in Fremont Gold's long position.| Empire Metals vs. Solar Alliance Energy | Empire Metals vs. Global X Active | Empire Metals vs. Financial 15 Split | Empire Metals vs. Rubicon Organics |
| Fremont Gold vs. Tesoro Minerals Corp | Fremont Gold vs. Palamina Corp | Fremont Gold vs. Empire Metals Corp |
Check out your portfolio center.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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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