Correlation Between Freeport McMoran and GoldMining

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

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

Diversification Opportunities for Freeport McMoran and GoldMining

-0.1

Correlation Coefficient

Freeport McMoran  GoldMining

Good diversification

The 3 months correlation between Freeport and GoldMining is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Freeport McMoran Copper Gold and GoldMining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoldMining and Freeport McMoran 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 Freeport McMoran Copper Gold are associated (or correlated) with GoldMining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoldMining has no effect on the direction of Freeport McMoran i.e., Freeport McMoran and GoldMining go up and down completely randomly.

Pair Corralation between Freeport McMoran and GoldMining

Considering the 90-day investment horizon Freeport McMoran is expected to generate 7.98 times less return on investment than GoldMining. But when comparing it to its historical volatility, Freeport McMoran Copper Gold is 1.47 times less risky than GoldMining. It trades about 0.04 of its potential returns per unit of risk. GoldMining is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  78.00  in GoldMining on August 1, 2025 and sell it today you would earn a total of  56.00  from holding GoldMining or generate 71.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Freeport McMoran Copper Gold  vs.  GoldMining

Freeport McMoran Copper

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Freeport McMoran Copper Gold are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady fundamental indicators, Freeport McMoran may actually be approaching a critical reversion point that can send shares even higher in November 2025.

GoldMining

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GoldMining are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady fundamental indicators, GoldMining reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Freeport McMoran and GoldMining

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

The idea behind Freeport McMoran Copper Gold and GoldMining 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.