Correlation Between Freegold Ventures and Huntsman Exploration
Can any of the company-specific risk be diversified away by investing in both Freegold Ventures and Huntsman Exploration 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 Freegold Ventures and Huntsman Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Freegold Ventures Limited and Huntsman Exploration, you can compare the effects of market volatilities on Freegold Ventures and Huntsman Exploration 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 Freegold Ventures with a short position of Huntsman Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freegold Ventures and Huntsman Exploration.
Diversification Opportunities for Freegold Ventures and Huntsman Exploration
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Freegold and Huntsman is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Freegold Ventures Limited and Huntsman Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huntsman Exploration and Freegold Ventures 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 Freegold Ventures Limited are associated (or correlated) with Huntsman Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huntsman Exploration has no effect on the direction of Freegold Ventures i.e., Freegold Ventures and Huntsman Exploration go up and down completely randomly.
Pair Corralation between Freegold Ventures and Huntsman Exploration
Assuming the 90 days horizon Freegold Ventures Limited is expected to generate 0.75 times more return on investment than Huntsman Exploration. However, Freegold Ventures Limited is 1.32 times less risky than Huntsman Exploration. It trades about 0.21 of its potential returns per unit of risk. Huntsman Exploration is currently generating about 0.09 per unit of risk. If you would invest 49.00 in Freegold Ventures Limited on October 15, 2024 and sell it today you would earn a total of 11.00 from holding Freegold Ventures Limited or generate 22.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.74% |
| Values | Daily Returns |
Freegold Ventures Limited vs. Huntsman Exploration
Performance |
| Timeline |
| Freegold Ventures |
| Huntsman Exploration |
Freegold Ventures and Huntsman Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freegold Ventures and Huntsman Exploration
The main advantage of trading using opposite Freegold Ventures and Huntsman Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freegold Ventures position performs unexpectedly, Huntsman Exploration 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 Huntsman Exploration will offset losses from the drop in Huntsman Exploration's long position.| Freegold Ventures vs. Mundoro Capital | Freegold Ventures vs. Norra Metals Corp | Freegold Ventures vs. E79 Resources Corp | Freegold Ventures vs. Voltage Metals Corp |
| Huntsman Exploration vs. Aurelia Metals Limited | Huntsman Exploration vs. Adriatic Metals PLC | Huntsman Exploration vs. American Helium | Huntsman Exploration vs. Progressive Planet Solutions |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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