Correlation Between Lion One and Fremont Gold
Can any of the company-specific risk be diversified away by investing in both Lion One 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 Lion One and Fremont Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion One Metals and Fremont Gold, you can compare the effects of market volatilities on Lion One 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 Lion One with a short position of Fremont Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Fremont Gold.
Diversification Opportunities for Lion One and Fremont Gold
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lion and Fremont is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and Fremont Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fremont Gold and Lion One 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 Lion One Metals 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 Lion One i.e., Lion One and Fremont Gold go up and down completely randomly.
Pair Corralation between Lion One and Fremont Gold
Assuming the 90 days horizon Lion One Metals is expected to under-perform the Fremont Gold. But the otc stock apears to be less risky and, when comparing its historical volatility, Lion One Metals is 2.4 times less risky than Fremont Gold. The otc stock trades about -0.04 of its potential returns per unit of risk. The Fremont Gold is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 7.50 in Fremont Gold on October 25, 2024 and sell it today you would earn a total of 0.63 from holding Fremont Gold or generate 8.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion One Metals vs. Fremont Gold
Performance |
| Timeline |
| Lion One Metals |
| Fremont Gold |
Lion One and Fremont Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and Fremont Gold
The main advantage of trading using opposite Lion One and Fremont Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One 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.| Lion One vs. Arctic Star Exploration | Lion One vs. American Clean Resources | Lion One vs. Arras Minerals Corp | Lion One vs. American Creek 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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