Correlation Between RTG Mining and Fremont Gold

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

Diversification Opportunities for RTG Mining and Fremont Gold

-0.38

Correlation Coefficient

RTG Mining  Fremont Gold

Very good diversification

The 3 months correlation between RTG and Fremont is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding RTG Mining and Fremont Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fremont Gold and RTG 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 RTG Mining 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 RTG Mining i.e., RTG Mining and Fremont Gold go up and down completely randomly.

Pair Corralation between RTG Mining and Fremont Gold

Assuming the 90 days trading horizon RTG Mining is expected to generate 1.63 times more return on investment than Fremont Gold. However, RTG Mining is 1.63 times more volatile than Fremont Gold. It trades about -0.02 of its potential returns per unit of risk. Fremont Gold is currently generating about -0.1 per unit of risk. If you would invest  4.00  in RTG Mining on September 4, 2024 and sell it today you would lose (1.50) from holding RTG Mining or give up 37.5% of portfolio value over 90 days.

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

RTG Mining  vs.  Fremont Gold

RTG Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RTG Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

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

Pair Trading with RTG Mining and Fremont Gold

The main advantage of trading using opposite RTG Mining and Fremont Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RTG 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.

The idea behind RTG Mining and Fremont 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.

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 Stocks Directory module to find actively traded stocks across global markets.