Correlation Between Freegold Ventures and Pershing Resources

Can any of the company-specific risk be diversified away by investing in both Freegold Ventures and Pershing Resources 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 Pershing Resources 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 Pershing Resources, you can compare the effects of market volatilities on Freegold Ventures and Pershing Resources 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 Pershing Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freegold Ventures and Pershing Resources.

Diversification Opportunities for Freegold Ventures and Pershing Resources

0.51

Correlation Coefficient

Freegold Ventures  Pershing Resources

Very weak diversification

The 3 months correlation between Freegold and Pershing is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Freegold Ventures Limited and Pershing Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pershing Resources 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 Pershing Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pershing Resources has no effect on the direction of Freegold Ventures i.e., Freegold Ventures and Pershing Resources go up and down completely randomly.

Pair Corralation between Freegold Ventures and Pershing Resources

Assuming the 90 days horizon Freegold Ventures Limited is expected to under-perform the Pershing Resources. But the otc stock apears to be less risky and, when comparing its historical volatility, Freegold Ventures Limited is 2.78 times less risky than Pershing Resources. The otc stock trades about -0.23 of its potential returns per unit of risk. The Pershing Resources is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  2.06  in Pershing Resources on September 29, 2024 and sell it today you would lose (0.56) from holding Pershing Resources or give up 27.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.92%
Values	Daily Returns

Freegold Ventures Limited  vs.  Pershing Resources

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.

Pershing Resources

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Pershing Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively fragile technical and fundamental indicators, Pershing Resources may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Freegold Ventures and Pershing Resources

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

The idea behind Freegold Ventures Limited and Pershing Resources 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.