Correlation Between Hycroft Mining and Fremont Gold
Can any of the company-specific risk be diversified away by investing in both Hycroft Mining and Fremont 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 Hycroft Mining and Fremont Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hycroft Mining Holding and Fremont Gold, you can compare the effects of market volatilities on Hycroft Mining and Fremont 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 Hycroft Mining with a short position of Fremont Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hycroft Mining and Fremont Gold.
Diversification Opportunities for Hycroft Mining and Fremont Gold
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hycroft and Fremont is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Hycroft Mining Holding and Fremont Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fremont Gold and Hycroft Mining 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 Hycroft Mining Holding are associated (or correlated) with Fremont Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fremont Gold has no effect on the direction of Hycroft Mining i.e., Hycroft Mining and Fremont Gold go up and down completely randomly.
Pair Corralation between Hycroft Mining and Fremont Gold
Assuming the 90 days horizon Hycroft Mining Holding is expected to generate 1.01 times more return on investment than Fremont Gold. However, Hycroft Mining is 1.01 times more volatile than Fremont Gold. It trades about 0.05 of its potential returns per unit of risk. Fremont Gold is currently generating about 0.05 per unit of risk. If you would invest 1.50 in Hycroft Mining Holding on October 23, 2024 and sell it today you would lose (0.28) from holding Hycroft Mining Holding or give up 18.67% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 95.0% |
Values | Daily Returns |
Hycroft Mining Holding vs. Fremont Gold
Performance |
Timeline |
Hycroft Mining Holding |
Fremont Gold |
Hycroft Mining and Fremont Gold Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hycroft Mining and Fremont Gold
The main advantage of trading using opposite Hycroft Mining and Fremont Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hycroft Mining position performs unexpectedly, Fremont 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 Fremont Gold will offset losses from the drop in Fremont Gold's long position.Hycroft Mining vs. Hycroft Mining Holding | Hycroft Mining vs. Hycroft Mining Holding | Hycroft Mining vs. Hall of Fame |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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