Correlation Between Freegold Ventures and Helium One

Can any of the company-specific risk be diversified away by investing in both Freegold Ventures and Helium One 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 Freegold Ventures and Helium One into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Freegold Ventures Limited and Helium One Global, you can compare the effects of market volatilities on Freegold Ventures and Helium One 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 Freegold Ventures with a short position of Helium One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freegold Ventures and Helium One.

Diversification Opportunities for Freegold Ventures and Helium One

0.27

Correlation Coefficient

Freegold Ventures  Helium One

Modest diversification

The 3 months correlation between Freegold and Helium is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Freegold Ventures Limited and Helium One Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helium One Global and Freegold Ventures 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 Freegold Ventures Limited are associated (or correlated) with Helium One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helium One Global has no effect on the direction of Freegold Ventures i.e., Freegold Ventures and Helium One go up and down completely randomly.

Pair Corralation between Freegold Ventures and Helium One

Assuming the 90 days horizon Freegold Ventures is expected to generate 2.96 times less return on investment than Helium One. But when comparing it to its historical volatility, Freegold Ventures Limited is 1.97 times less risky than Helium One. It trades about 0.12 of its potential returns per unit of risk. Helium One Global is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  1.40  in Helium One Global on October 11, 2024 and sell it today you would earn a total of  0.60  from holding Helium One Global or generate 42.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Freegold Ventures Limited  vs.  Helium One Global

Freegold Ventures

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Freegold Ventures Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Helium One Global

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Helium One Global are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Helium One reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Freegold Ventures and Helium One

The main advantage of trading using opposite Freegold Ventures and Helium One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freegold Ventures position performs unexpectedly, Helium One 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 Helium One will offset losses from the drop in Helium One's long position.

The idea behind Freegold Ventures Limited and Helium One Global 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.