Correlation Between Fremont Gold and Vista Gold

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

Diversification Opportunities for Fremont Gold and Vista Gold

-0.62

Correlation Coefficient

Fremont Gold  Vista Gold

Excellent diversification

The 3 months correlation between Fremont and Vista is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Fremont Gold and Vista Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vista Gold 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 Vista Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vista Gold has no effect on the direction of Fremont Gold i.e., Fremont Gold and Vista Gold go up and down completely randomly.

Pair Corralation between Fremont Gold and Vista Gold

Assuming the 90 days horizon Fremont Gold is expected to under-perform the Vista Gold. In addition to that, Fremont Gold is 2.65 times more volatile than Vista Gold. It trades about -0.02 of its total potential returns per unit of risk. Vista Gold is currently generating about 0.06 per unit of volatility. If you would invest  77.00  in Vista Gold on September 3, 2024 and sell it today you would earn a total of  8.00  from holding Vista Gold or generate 10.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Fremont Gold  vs.  Vista Gold

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.

Vista Gold

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vista Gold are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Vista Gold displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fremont Gold and Vista Gold

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

The idea behind Fremont Gold and Vista Gold 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 CEOs Directory module to screen CEOs from public companies around the world.