Correlation Between Norsemont Mining and Fremont Gold
Can any of the company-specific risk be diversified away by investing in both Norsemont Mining 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 Norsemont Mining and Fremont Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Norsemont Mining and Fremont Gold, you can compare the effects of market volatilities on Norsemont Mining 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 Norsemont Mining with a short position of Fremont Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norsemont Mining and Fremont Gold.
Diversification Opportunities for Norsemont Mining and Fremont Gold
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Norsemont and Fremont is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Norsemont Mining and Fremont Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fremont Gold and Norsemont Mining 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 Norsemont Mining 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 Norsemont Mining i.e., Norsemont Mining and Fremont Gold go up and down completely randomly.
Pair Corralation between Norsemont Mining and Fremont Gold
Assuming the 90 days horizon Norsemont Mining is expected to generate 0.39 times more return on investment than Fremont Gold. However, Norsemont Mining is 2.58 times less risky than Fremont Gold. It trades about -0.01 of its potential returns per unit of risk. Fremont Gold is currently generating about -0.06 per unit of risk. If you would invest 20.00 in Norsemont Mining on August 30, 2024 and sell it today you would lose (1.00) from holding Norsemont Mining or give up 5.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norsemont Mining vs. Fremont Gold
Performance |
| Timeline |
| Norsemont Mining |
| Fremont Gold |
Norsemont Mining and Fremont Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norsemont Mining and Fremont Gold
The main advantage of trading using opposite Norsemont Mining and Fremont Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norsemont Mining 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.| Norsemont Mining vs. Newcore Gold | Norsemont Mining vs. Cerrado Gold | Norsemont Mining vs. Palamina Corp | Norsemont Mining vs. Gold Springs Resource |
| Fremont Gold vs. Vertiv Holdings Co | Fremont Gold vs. Nasdaq Inc | Fremont Gold vs. McDonalds | Fremont Gold 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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