Correlation Between Palamina Corp and Fremont Gold
Can any of the company-specific risk be diversified away by investing in both Palamina Corp 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 Palamina Corp and Fremont Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Palamina Corp and Fremont Gold, you can compare the effects of market volatilities on Palamina Corp 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 Palamina Corp with a short position of Fremont Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palamina Corp and Fremont Gold.
Diversification Opportunities for Palamina Corp and Fremont Gold
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Palamina and Fremont is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Palamina Corp and Fremont Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fremont Gold and Palamina Corp 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 Palamina Corp 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 Palamina Corp i.e., Palamina Corp and Fremont Gold go up and down completely randomly.
Pair Corralation between Palamina Corp and Fremont Gold
Assuming the 90 days horizon Palamina Corp is expected to under-perform the Fremont Gold. But the otc stock apears to be less risky and, when comparing its historical volatility, Palamina Corp is 1.39 times less risky than Fremont Gold. The otc stock trades about -0.2 of its potential returns per unit of risk. The Fremont Gold is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 11.00 in Fremont Gold on September 2, 2024 and sell it today you would lose (3.36) from holding Fremont Gold or give up 30.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Palamina Corp vs. Fremont Gold
Performance |
| Timeline |
| Palamina Corp |
| Fremont Gold |
Palamina Corp and Fremont Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Palamina Corp and Fremont Gold
The main advantage of trading using opposite Palamina Corp and Fremont Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palamina Corp 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.| Palamina Corp vs. Aurion Resources | Palamina Corp vs. Rio2 Limited | Palamina Corp vs. Grande Portage Resources |
| Fremont Gold vs. Aurion Resources | Fremont Gold vs. Rio2 Limited | Fremont Gold vs. Palamina Corp | Fremont Gold vs. Grande Portage 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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