Correlation Between BCM Resources and Fremont Gold

Can any of the company-specific risk be diversified away by investing in both BCM 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 BCM 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 BCM Resources Corp and Fremont Gold, you can compare the effects of market volatilities on BCM 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 BCM Resources with a short position of Fremont Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCM Resources and Fremont Gold.

Diversification Opportunities for BCM Resources and Fremont Gold

0.0

Correlation Coefficient

BCM Resources  Fremont Gold

Pay attention - limited upside

The 3 months correlation between BCM and Fremont is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BCM 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 BCM 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 BCM 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 BCM Resources i.e., BCM Resources and Fremont Gold go up and down completely randomly.

Pair Corralation between BCM Resources and Fremont Gold

If you would invest  9.50  in Fremont Gold on October 25, 2024 and sell it today you would earn a total of  1.50  from holding Fremont Gold or generate 15.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	11.11%
Values	Daily Returns

BCM Resources Corp  vs.  Fremont Gold

BCM Resources Corp

Risk-Adjusted Performance

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Modest

Over the last 90 days BCM Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, BCM Resources is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Fremont Gold

Risk-Adjusted Performance

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Weak

Over the last 90 days Fremont Gold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly weak basic indicators, Fremont Gold may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with BCM Resources and Fremont Gold

The main advantage of trading using opposite BCM Resources and Fremont Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCM 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.

The idea behind BCM Resources Corp and Fremont Gold pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.