Correlation Between Fremont Gold and Sun Summit
Can any of the company-specific risk be diversified away by investing in both Fremont Gold and Sun Summit 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 Sun Summit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fremont Gold and Sun Summit Minerals, you can compare the effects of market volatilities on Fremont Gold and Sun Summit 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 Sun Summit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fremont Gold and Sun Summit.
Diversification Opportunities for Fremont Gold and Sun Summit
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Fremont and Sun is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Fremont Gold and Sun Summit Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Summit Minerals 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 Sun Summit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Summit Minerals has no effect on the direction of Fremont Gold i.e., Fremont Gold and Sun Summit go up and down completely randomly.
Pair Corralation between Fremont Gold and Sun Summit
Assuming the 90 days horizon Fremont Gold is expected to generate 1.42 times more return on investment than Sun Summit. However, Fremont Gold is 1.42 times more volatile than Sun Summit Minerals. It trades about -0.09 of its potential returns per unit of risk. Sun Summit Minerals is currently generating about -0.44 per unit of risk. If you would invest 17.00 in Fremont Gold on August 30, 2024 and sell it today you would lose (5.00) from holding Fremont Gold or give up 29.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fremont Gold vs. Sun Summit Minerals
Performance |
| Timeline |
| Fremont Gold |
| Sun Summit Minerals |
Fremont Gold and Sun Summit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fremont Gold and Sun Summit
The main advantage of trading using opposite Fremont Gold and Sun Summit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fremont Gold position performs unexpectedly, Sun Summit 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 Sun Summit will offset losses from the drop in Sun Summit's long position.| 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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