Correlation Between Fremont Gold and C3 Metals

Can any of the company-specific risk be diversified away by investing in both Fremont Gold and C3 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 Fremont Gold and C3 Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fremont Gold and C3 Metals, you can compare the effects of market volatilities on Fremont Gold and C3 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 Fremont Gold with a short position of C3 Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fremont Gold and C3 Metals.

Diversification Opportunities for Fremont Gold and C3 Metals

0.15

Correlation Coefficient

Fremont Gold  C3 Metals

Average diversification

The 3 months correlation between Fremont and CCCM is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Fremont Gold and C3 Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C3 Metals 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 C3 Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C3 Metals has no effect on the direction of Fremont Gold i.e., Fremont Gold and C3 Metals go up and down completely randomly.

Pair Corralation between Fremont Gold and C3 Metals

Assuming the 90 days horizon Fremont Gold is expected to under-perform the C3 Metals. In addition to that, Fremont Gold is 2.9 times more volatile than C3 Metals. It trades about -0.03 of its total potential returns per unit of risk. C3 Metals is currently generating about 0.18 per unit of volatility. If you would invest  24.00  in C3 Metals on October 10, 2024 and sell it today you would earn a total of  3.00  from holding C3 Metals or generate 12.5% return on investment over 90 days.

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

Fremont Gold  vs.  C3 Metals

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 fairly stable basic indicators, Fremont Gold is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

C3 Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days C3 Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's fundamental indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Fremont Gold and C3 Metals

The main advantage of trading using opposite Fremont Gold and C3 Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fremont Gold position performs unexpectedly, C3 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 C3 Metals will offset losses from the drop in C3 Metals' long position.

The idea behind Fremont Gold and C3 Metals 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.