Correlation Between Fremont Gold and Mundoro Capital
Can any of the company-specific risk be diversified away by investing in both Fremont Gold and Mundoro Capital 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 Fremont Gold and Mundoro Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fremont Gold and Mundoro Capital, you can compare the effects of market volatilities on Fremont Gold and Mundoro Capital 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 Fremont Gold with a short position of Mundoro Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fremont Gold and Mundoro Capital.
Diversification Opportunities for Fremont Gold and Mundoro Capital
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Fremont and Mundoro is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Fremont Gold and Mundoro Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mundoro Capital and Fremont Gold 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 Fremont Gold are associated (or correlated) with Mundoro Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mundoro Capital has no effect on the direction of Fremont Gold i.e., Fremont Gold and Mundoro Capital go up and down completely randomly.
Pair Corralation between Fremont Gold and Mundoro Capital
Assuming the 90 days horizon Fremont Gold is expected to generate 5.52 times more return on investment than Mundoro Capital. However, Fremont Gold is 5.52 times more volatile than Mundoro Capital. It trades about 0.18 of its potential returns per unit of risk. Mundoro Capital is currently generating about -0.12 per unit of risk. If you would invest 9.50 in Fremont Gold on October 25, 2024 and sell it today you would earn a total of 1.50 from holding Fremont Gold or generate 15.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 47.37% |
| Values | Daily Returns |
Fremont Gold vs. Mundoro Capital
Performance |
| Timeline |
| Fremont Gold |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Mundoro Capital |
Fremont Gold and Mundoro Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fremont Gold and Mundoro Capital
The main advantage of trading using opposite Fremont Gold and Mundoro Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fremont Gold position performs unexpectedly, Mundoro Capital 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 Mundoro Capital will offset losses from the drop in Mundoro Capital's long position.| Fremont Gold vs. Tesoro Minerals Corp | Fremont Gold vs. Palamina Corp | Fremont Gold vs. Empire Metals Corp |
| Mundoro Capital vs. Data Communications Management | Mundoro Capital vs. Andlauer Healthcare Gr | Mundoro Capital vs. Advent Wireless | Mundoro Capital vs. North American Construction |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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