Correlation Between Fremont Gold and IShares Fundamental

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

By analyzing existing cross correlation between Fremont Gold and iShares Fundamental Hedged, you can compare the effects of market volatilities on Fremont Gold and IShares Fundamental 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 IShares Fundamental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fremont Gold and IShares Fundamental.

Diversification Opportunities for Fremont Gold and IShares Fundamental

0.7

Correlation Coefficient

Fremont Gold  IShares Fundamental

Poor diversification

The 3 months correlation between Fremont and IShares is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Fremont Gold and iShares Fundamental Hedged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Fundamental 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 IShares Fundamental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Fundamental has no effect on the direction of Fremont Gold i.e., Fremont Gold and IShares Fundamental go up and down completely randomly.

Pair Corralation between Fremont Gold and IShares Fundamental

Assuming the 90 days horizon Fremont Gold is expected to generate 9.72 times more return on investment than IShares Fundamental. However, Fremont Gold is 9.72 times more volatile than iShares Fundamental Hedged. It trades about 0.04 of its potential returns per unit of risk. iShares Fundamental Hedged is currently generating about 0.07 per unit of risk. If you would invest  8.00  in Fremont Gold on October 24, 2024 and sell it today you would earn a total of  3.00  from holding Fremont Gold or generate 37.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	97.98%
Values	Daily Returns

Fremont Gold  vs.  iShares Fundamental Hedged

Fremont Gold

Risk-Adjusted Performance

0 of 100

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 weak basic indicators, Fremont Gold may actually be approaching a critical reversion point that can send shares even higher in February 2025.

iShares Fundamental

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Fundamental Hedged are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, IShares Fundamental is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Fremont Gold and IShares Fundamental

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

The idea behind Fremont Gold and iShares Fundamental Hedged 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.