Correlation Between Fremont Gold and Brookfield

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

By analyzing existing cross correlation between Fremont Gold and Brookfield, you can compare the effects of market volatilities on Fremont Gold and Brookfield 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 Fremont Gold with a short position of Brookfield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fremont Gold and Brookfield.

Diversification Opportunities for Fremont Gold and Brookfield

-0.72

Correlation Coefficient

Fremont Gold  Brookfield

Pay attention - limited upside

The 3 months correlation between Fremont and Brookfield is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Fremont Gold and Brookfield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield and Fremont Gold 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 Fremont Gold are associated (or correlated) with Brookfield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield has no effect on the direction of Fremont Gold i.e., Fremont Gold and Brookfield go up and down completely randomly.

Pair Corralation between Fremont Gold and Brookfield

Assuming the 90 days horizon Fremont Gold is expected to under-perform the Brookfield. In addition to that, Fremont Gold is 7.96 times more volatile than Brookfield. It trades about -0.1 of its total potential returns per unit of risk. Brookfield is currently generating about 0.32 per unit of volatility. If you would invest  2,364  in Brookfield on October 9, 2024 and sell it today you would earn a total of  119.00  from holding Brookfield or generate 5.03% return on investment over 90 days.

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

Fremont Gold  vs.  Brookfield

Fremont Gold

Risk-Adjusted Performance

0 of 100

Very 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 latest weak performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Brookfield

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal basic indicators, Brookfield may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Fremont Gold and Brookfield

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

The idea behind Fremont Gold and Brookfield 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.