Correlation Between Freegold Ventures and American Creek
Can any of the company-specific risk be diversified away by investing in both Freegold Ventures and American Creek 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 American Creek 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 American Creek Resources, you can compare the effects of market volatilities on Freegold Ventures and American Creek 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 American Creek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freegold Ventures and American Creek.
Diversification Opportunities for Freegold Ventures and American Creek
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Freegold and American is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Freegold Ventures Limited and American Creek Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Creek 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 American Creek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Creek Resources has no effect on the direction of Freegold Ventures i.e., Freegold Ventures and American Creek go up and down completely randomly.
Pair Corralation between Freegold Ventures and American Creek
Assuming the 90 days trading horizon Freegold Ventures is expected to generate 1.53 times less return on investment than American Creek. But when comparing it to its historical volatility, Freegold Ventures Limited is 1.99 times less risky than American Creek. It trades about 0.1 of its potential returns per unit of risk. American Creek Resources is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 12.00 in American Creek Resources on September 1, 2024 and sell it today you would earn a total of 18.00 from holding American Creek Resources or generate 150.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Freegold Ventures Limited vs. American Creek Resources
Performance |
| Timeline |
| Freegold Ventures |
| American Creek Resources |
Freegold Ventures and American Creek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freegold Ventures and American Creek
The main advantage of trading using opposite Freegold Ventures and American Creek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freegold Ventures position performs unexpectedly, American Creek 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 American Creek will offset losses from the drop in American Creek's long position.| Freegold Ventures vs. Teuton Resources Corp | Freegold Ventures vs. Dolly Varden Silver | Freegold Ventures vs. Galway Metals | Freegold Ventures vs. Liberty Gold Corp |
| American Creek vs. Minaurum Gold | American Creek vs. Dolly Varden Silver | American Creek vs. Santacruz Silv | American Creek vs. GoGold Resources |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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