Correlation Between Hummingbird Resources and Fremont Gold
Can any of the company-specific risk be diversified away by investing in both Hummingbird Resources and Fremont Gold 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 Hummingbird Resources and Fremont Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hummingbird Resources PLC and Fremont Gold, you can compare the effects of market volatilities on Hummingbird Resources and Fremont Gold 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 Hummingbird Resources with a short position of Fremont Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hummingbird Resources and Fremont Gold.
Diversification Opportunities for Hummingbird Resources and Fremont Gold
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hummingbird and Fremont is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Hummingbird Resources PLC and Fremont Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fremont Gold and Hummingbird Resources 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 Hummingbird Resources PLC are associated (or correlated) with Fremont Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fremont Gold has no effect on the direction of Hummingbird Resources i.e., Hummingbird Resources and Fremont Gold go up and down completely randomly.
Pair Corralation between Hummingbird Resources and Fremont Gold
Assuming the 90 days horizon Hummingbird Resources PLC is expected to under-perform the Fremont Gold. In addition to that, Hummingbird Resources is 1.15 times more volatile than Fremont Gold. It trades about -0.17 of its total potential returns per unit of risk. Fremont Gold is currently generating about 0.09 per unit of volatility. If you would invest 9.23 in Fremont Gold on August 26, 2024 and sell it today you would earn a total of 0.67 from holding Fremont Gold or generate 7.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hummingbird Resources PLC vs. Fremont Gold
Performance |
| Timeline |
| Hummingbird Resources PLC |
| Fremont Gold |
Hummingbird Resources and Fremont Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hummingbird Resources and Fremont Gold
The main advantage of trading using opposite Hummingbird Resources and Fremont Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hummingbird Resources position performs unexpectedly, Fremont Gold 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 Fremont Gold will offset losses from the drop in Fremont Gold's long position.| Hummingbird Resources vs. Aurion Resources | Hummingbird Resources vs. Liberty Gold Corp | Hummingbird Resources vs. Orezone Gold Corp | Hummingbird Resources vs. Radisson Mining Resources |
| Fremont Gold vs. Altamira Gold Corp | Fremont Gold vs. Rio2 Limited | Fremont Gold vs. Novo Resources Corp | Fremont Gold vs. Lion One Metals |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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