Correlation Between Fremont Gold and TNR Gold

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

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

Diversification Opportunities for Fremont Gold and TNR Gold

0.1

Correlation Coefficient

Fremont Gold  TNR Gold

Average diversification

The 3 months correlation between Fremont and TNR is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Fremont Gold and TNR Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TNR Gold Corp 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 TNR Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TNR Gold Corp has no effect on the direction of Fremont Gold i.e., Fremont Gold and TNR Gold go up and down completely randomly.

Pair Corralation between Fremont Gold and TNR Gold

Assuming the 90 days horizon Fremont Gold is expected to generate 1.74 times more return on investment than TNR Gold. However, Fremont Gold is 1.74 times more volatile than TNR Gold Corp. It trades about 0.01 of its potential returns per unit of risk. TNR Gold Corp is currently generating about -0.01 per unit of risk. If you would invest  11.00  in Fremont Gold on October 10, 2024 and sell it today you would lose (2.50) from holding Fremont Gold or give up 22.73% of portfolio value over 90 days.

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

Fremont Gold  vs.  TNR Gold Corp

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.

TNR Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TNR Gold Corp 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 basic 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 TNR Gold

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

The idea behind Fremont Gold and TNR Gold 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.