Correlation Between Strategic Resources and Freegold Ventures

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

By analyzing existing cross correlation between Strategic Resources and Freegold Ventures Limited, you can compare the effects of market volatilities on Strategic Resources and Freegold Ventures 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 Strategic Resources with a short position of Freegold Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Resources and Freegold Ventures.

Diversification Opportunities for Strategic Resources and Freegold Ventures

-0.03

Correlation Coefficient

Strategic Resources  Freegold Ventures

Good diversification

The 3 months correlation between Strategic and Freegold is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Resources and Freegold Ventures Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freegold Ventures and Strategic Resources 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 Strategic Resources are associated (or correlated) with Freegold Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freegold Ventures has no effect on the direction of Strategic Resources i.e., Strategic Resources and Freegold Ventures go up and down completely randomly.

Pair Corralation between Strategic Resources and Freegold Ventures

Assuming the 90 days horizon Strategic Resources is expected to under-perform the Freegold Ventures. But the pink sheet apears to be less risky and, when comparing its historical volatility, Strategic Resources is 2.99 times less risky than Freegold Ventures. The pink sheet trades about -0.13 of its potential returns per unit of risk. The Freegold Ventures Limited is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  50.00  in Freegold Ventures Limited on December 28, 2024 and sell it today you would earn a total of  12.00  from holding Freegold Ventures Limited or generate 24.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Strategic Resources  vs.  Freegold Ventures Limited

Strategic Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Strategic Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Freegold Ventures

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Freegold Ventures Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Freegold Ventures reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Strategic Resources and Freegold Ventures

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

The idea behind Strategic Resources and Freegold Ventures Limited 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.