Correlation Between Fremont Gold and Hummingbird Resources
Can any of the company-specific risk be diversified away by investing in both Fremont Gold and Hummingbird 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 Fremont Gold and Hummingbird Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fremont Gold and Hummingbird Resources PLC, you can compare the effects of market volatilities on Fremont Gold and Hummingbird 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 Fremont Gold with a short position of Hummingbird Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fremont Gold and Hummingbird Resources.
Diversification Opportunities for Fremont Gold and Hummingbird Resources
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fremont and Hummingbird is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Fremont Gold and Hummingbird Resources PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hummingbird Resources PLC 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 Hummingbird Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hummingbird Resources PLC has no effect on the direction of Fremont Gold i.e., Fremont Gold and Hummingbird Resources go up and down completely randomly.
Pair Corralation between Fremont Gold and Hummingbird Resources
Assuming the 90 days horizon Fremont Gold is expected to generate 0.87 times more return on investment than Hummingbird Resources. However, Fremont Gold is 1.15 times less risky than Hummingbird Resources. It trades about -0.06 of its potential returns per unit of risk. Hummingbird Resources PLC is currently generating about -0.23 per unit of risk. If you would invest 13.00 in Fremont Gold on August 30, 2024 and sell it today you would lose (5.05) from holding Fremont Gold or give up 38.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fremont Gold vs. Hummingbird Resources PLC
Performance |
| Timeline |
| Fremont Gold |
| Hummingbird Resources PLC |
Fremont Gold and Hummingbird Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fremont Gold and Hummingbird Resources
The main advantage of trading using opposite Fremont Gold and Hummingbird Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fremont Gold position performs unexpectedly, Hummingbird 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 Hummingbird Resources will offset losses from the drop in Hummingbird Resources' long position.| Fremont Gold vs. Vertiv Holdings Co | Fremont Gold vs. Nasdaq Inc | Fremont Gold vs. McDonalds | Fremont Gold vs. Walmart |
| Hummingbird Resources vs. Vertiv Holdings Co | Hummingbird Resources vs. Nasdaq Inc | Hummingbird Resources vs. McDonalds | Hummingbird Resources vs. Walmart |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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