Correlation Between Freegold Ventures and Bravada Gold

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

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

Diversification Opportunities for Freegold Ventures and Bravada Gold

0.71

Correlation Coefficient

Freegold Ventures  Bravada Gold

Poor diversification

The 3 months correlation between Freegold and Bravada is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Freegold Ventures Limited and Bravada Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bravada Gold and Freegold Ventures 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 Freegold Ventures Limited are associated (or correlated) with Bravada Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bravada Gold has no effect on the direction of Freegold Ventures i.e., Freegold Ventures and Bravada Gold go up and down completely randomly.

Pair Corralation between Freegold Ventures and Bravada Gold

Assuming the 90 days horizon Freegold Ventures Limited is expected to generate 0.4 times more return on investment than Bravada Gold. However, Freegold Ventures Limited is 2.52 times less risky than Bravada Gold. It trades about 0.1 of its potential returns per unit of risk. Bravada Gold is currently generating about 0.0 per unit of risk. If you would invest  30.00  in Freegold Ventures Limited on September 29, 2024 and sell it today you would earn a total of  18.00  from holding Freegold Ventures Limited or generate 60.0% return on investment over 90 days.

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

Freegold Ventures Limited  vs.  Bravada Gold

Freegold Ventures

Risk-Adjusted Performance

0 of 100

Very Weak

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

Bravada Gold

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bravada Gold are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Bravada Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Freegold Ventures and Bravada Gold

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

The idea behind Freegold Ventures Limited and Bravada 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.