Correlation Between Freegold Ventures and Voltage Metals

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

Diversification Opportunities for Freegold Ventures and Voltage Metals

-0.4

Correlation Coefficient

Freegold Ventures  Voltage Metals

Very good diversification

The 3 months correlation between Freegold and Voltage is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Freegold Ventures Limited and Voltage Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voltage Metals Corp 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 Voltage Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voltage Metals Corp has no effect on the direction of Freegold Ventures i.e., Freegold Ventures and Voltage Metals go up and down completely randomly.

Pair Corralation between Freegold Ventures and Voltage Metals

Assuming the 90 days horizon Freegold Ventures Limited is expected to generate 0.45 times more return on investment than Voltage Metals. However, Freegold Ventures Limited is 2.24 times less risky than Voltage Metals. It trades about 0.08 of its potential returns per unit of risk. Voltage Metals Corp is currently generating about -0.17 per unit of risk. If you would invest  50.00  in Freegold Ventures Limited on December 30, 2024 and sell it today you would earn a total of  10.00  from holding Freegold Ventures Limited or generate 20.0% return on investment over 90 days.

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

Freegold Ventures Limited  vs.  Voltage Metals Corp

Freegold Ventures

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Freegold Ventures Limited are ranked lower than 6 (%) 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.

Voltage Metals Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Voltage Metals Corp 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 primary indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Freegold Ventures and Voltage Metals

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

The idea behind Freegold Ventures Limited and Voltage Metals Corp 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.