Correlation Between Freegold Ventures and Silver Dollar

Can any of the company-specific risk be diversified away by investing in both Freegold Ventures and Silver Dollar 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 Silver Dollar 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 Silver Dollar Resources, you can compare the effects of market volatilities on Freegold Ventures and Silver Dollar 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 Silver Dollar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freegold Ventures and Silver Dollar.

Diversification Opportunities for Freegold Ventures and Silver Dollar

0.54

Correlation Coefficient

Freegold Ventures  Silver Dollar

Very weak diversification

The 3 months correlation between Freegold and Silver is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Freegold Ventures Limited and Silver Dollar Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Dollar Resources 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 Silver Dollar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Dollar Resources has no effect on the direction of Freegold Ventures i.e., Freegold Ventures and Silver Dollar go up and down completely randomly.

Pair Corralation between Freegold Ventures and Silver Dollar

Assuming the 90 days horizon Freegold Ventures Limited is expected to generate 0.77 times more return on investment than Silver Dollar. However, Freegold Ventures Limited is 1.3 times less risky than Silver Dollar. It trades about 0.1 of its potential returns per unit of risk. Silver Dollar Resources is currently generating about -0.01 per unit of risk. If you would invest  49.00  in Freegold Ventures Limited on December 21, 2024 and sell it today you would earn a total of  13.00  from holding Freegold Ventures Limited or generate 26.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Freegold Ventures Limited  vs.  Silver Dollar Resources

Freegold Ventures

Risk-Adjusted Performance

OK

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

Silver Dollar Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Silver Dollar Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Silver Dollar is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Freegold Ventures and Silver Dollar

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

The idea behind Freegold Ventures Limited and Silver Dollar Resources 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.