Correlation Between Freegold Ventures and Tudor Gold

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

Diversification Opportunities for Freegold Ventures and Tudor Gold

0.91

Correlation Coefficient

Freegold Ventures  Tudor Gold

Almost no diversification

The 3 months correlation between Freegold and Tudor is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Freegold Ventures Limited and Tudor Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tudor Gold Corp 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 Tudor Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tudor Gold Corp has no effect on the direction of Freegold Ventures i.e., Freegold Ventures and Tudor Gold go up and down completely randomly.

Pair Corralation between Freegold Ventures and Tudor Gold

Assuming the 90 days trading horizon Freegold Ventures Limited is expected to generate 1.18 times more return on investment than Tudor Gold. However, Freegold Ventures is 1.18 times more volatile than Tudor Gold Corp. It trades about -0.15 of its potential returns per unit of risk. Tudor Gold Corp is currently generating about -0.23 per unit of risk. If you would invest  110.00  in Freegold Ventures Limited on September 24, 2024 and sell it today you would lose (39.00) from holding Freegold Ventures Limited or give up 35.45% of portfolio value over 90 days.

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

Freegold Ventures Limited  vs.  Tudor Gold Corp

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. In spite of abnormal performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Tudor Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tudor Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Freegold Ventures and Tudor Gold

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

The idea behind Freegold Ventures Limited and Tudor Gold Corp 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.