Correlation Between Fremont Gold and Tudor Gold

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

Diversification Opportunities for Fremont Gold and Tudor Gold

-0.27

Correlation Coefficient

Fremont Gold  Tudor Gold

Very good diversification

The 3 months correlation between Fremont and Tudor is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Fremont Gold and Tudor Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tudor 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 Tudor Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tudor Gold Corp has no effect on the direction of Fremont Gold i.e., Fremont Gold and Tudor Gold go up and down completely randomly.

Pair Corralation between Fremont Gold and Tudor Gold

Assuming the 90 days horizon Fremont Gold is expected to generate 4.01 times more return on investment than Tudor Gold. However, Fremont Gold is 4.01 times more volatile than Tudor Gold Corp. It trades about 0.28 of its potential returns per unit of risk. Tudor Gold Corp is currently generating about 0.01 per unit of risk. If you would invest  4.80  in Fremont Gold on December 29, 2024 and sell it today you would earn a total of  4.50  from holding Fremont Gold or generate 93.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	32.79%
Values	Daily Returns

Fremont Gold  vs.  Tudor Gold Corp

Fremont Gold

Risk-Adjusted Performance

Solid

Over the last 90 days Fremont Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, Fremont Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Tudor Gold Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tudor Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Tudor Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Fremont Gold and Tudor Gold

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

The idea behind Fremont Gold and Tudor 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.

Check out your portfolio center.

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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..