Correlation Between ROKMASTER Resources and Fremont Gold
Can any of the company-specific risk be diversified away by investing in both ROKMASTER 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 ROKMASTER 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 ROKMASTER Resources Corp and Fremont Gold, you can compare the effects of market volatilities on ROKMASTER 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 ROKMASTER Resources with a short position of Fremont Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of ROKMASTER Resources and Fremont Gold.
Diversification Opportunities for ROKMASTER Resources and Fremont Gold
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ROKMASTER and Fremont is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding ROKMASTER Resources Corp and Fremont Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fremont Gold and ROKMASTER 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 ROKMASTER Resources 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 ROKMASTER Resources i.e., ROKMASTER Resources and Fremont Gold go up and down completely randomly.
Pair Corralation between ROKMASTER Resources and Fremont Gold
Assuming the 90 days horizon ROKMASTER Resources is expected to generate 1.04 times less return on investment than Fremont Gold. In addition to that, ROKMASTER Resources is 1.44 times more volatile than Fremont Gold. It trades about 0.03 of its total potential returns per unit of risk. Fremont Gold is currently generating about 0.04 per unit of volatility. If you would invest 9.00 in Fremont Gold on October 18, 2024 and sell it today you would earn a total of 2.00 from holding Fremont Gold or generate 22.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.99% |
| Values | Daily Returns |
ROKMASTER Resources Corp vs. Fremont Gold
Performance |
| Timeline |
| ROKMASTER Resources Corp |
| Fremont Gold |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
ROKMASTER Resources and Fremont Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ROKMASTER Resources and Fremont Gold
The main advantage of trading using opposite ROKMASTER Resources and Fremont Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ROKMASTER 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.| ROKMASTER Resources vs. iShares Canadian HYBrid | ROKMASTER Resources vs. Altagas Cum Red | ROKMASTER Resources vs. European Residential Real | ROKMASTER Resources vs. iShares Fundamental Hedged |
| Fremont Gold vs. Tesoro Minerals Corp | Fremont Gold vs. Palamina Corp | Fremont Gold vs. Empire Metals Corp |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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