Correlation Between Freegold Ventures and Bitterroot Resources
Can any of the company-specific risk be diversified away by investing in both Freegold Ventures and Bitterroot Resources 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 Bitterroot Resources 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 Bitterroot Resources, you can compare the effects of market volatilities on Freegold Ventures and Bitterroot Resources 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 Bitterroot Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freegold Ventures and Bitterroot Resources.
Diversification Opportunities for Freegold Ventures and Bitterroot Resources
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Freegold and Bitterroot is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Freegold Ventures Limited and Bitterroot Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitterroot Resources 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 Bitterroot Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitterroot Resources has no effect on the direction of Freegold Ventures i.e., Freegold Ventures and Bitterroot Resources go up and down completely randomly.
Pair Corralation between Freegold Ventures and Bitterroot Resources
Assuming the 90 days horizon Freegold Ventures is expected to generate 2.17 times less return on investment than Bitterroot Resources. But when comparing it to its historical volatility, Freegold Ventures Limited is 3.38 times less risky than Bitterroot Resources. It trades about 0.21 of its potential returns per unit of risk. Bitterroot Resources is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 3.09 in Bitterroot Resources on October 15, 2024 and sell it today you would earn a total of 0.80 from holding Bitterroot Resources or generate 25.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Freegold Ventures Limited vs. Bitterroot Resources
Performance |
| Timeline |
| Freegold Ventures |
| Bitterroot Resources |
Freegold Ventures and Bitterroot Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freegold Ventures and Bitterroot Resources
The main advantage of trading using opposite Freegold Ventures and Bitterroot Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freegold Ventures position performs unexpectedly, Bitterroot Resources 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 Bitterroot Resources will offset losses from the drop in Bitterroot Resources' 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 |
| Bitterroot Resources vs. Golden Lake Exploration | Bitterroot Resources vs. Transition Metals Corp | Bitterroot Resources vs. Vendetta Mining Corp | Bitterroot Resources vs. Bayhorse Silver |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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