Correlation Between Starr Peak and Fremont Gold

Can any of the company-specific risk be diversified away by investing in both Starr Peak 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 Starr Peak and Fremont Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Starr Peak Exploration and Fremont Gold, you can compare the effects of market volatilities on Starr Peak 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 Starr Peak with a short position of Fremont Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Starr Peak and Fremont Gold.

Diversification Opportunities for Starr Peak and Fremont Gold

0.14

Correlation Coefficient

Starr Peak  Fremont Gold

Average diversification

The 3 months correlation between Starr and Fremont is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Starr Peak Exploration and Fremont Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fremont Gold and Starr Peak 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 Starr Peak Exploration 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 Starr Peak i.e., Starr Peak and Fremont Gold go up and down completely randomly.

Pair Corralation between Starr Peak and Fremont Gold

Assuming the 90 days horizon Starr Peak Exploration is expected to under-perform the Fremont Gold. But the stock apears to be less risky and, when comparing its historical volatility, Starr Peak Exploration is 1.76 times less risky than Fremont Gold. The stock trades about -0.01 of its potential returns per unit of risk. The Fremont Gold is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  8.50  in Fremont Gold on October 10, 2024 and sell it today you would earn a total of  0.00  from holding Fremont Gold or generate 0.0% return on investment over 90 days.

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

Starr Peak Exploration  vs.  Fremont Gold

Starr Peak Exploration

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Starr Peak Exploration has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Starr Peak is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated 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 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.

Pair Trading with Starr Peak and Fremont Gold

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

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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.