Correlation Between Fortitude Gold and Century Aluminum
Can any of the company-specific risk be diversified away by investing in both Fortitude Gold and Century Aluminum 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 Fortitude Gold and Century Aluminum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortitude Gold Corp and Century Aluminum, you can compare the effects of market volatilities on Fortitude Gold and Century Aluminum 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 Fortitude Gold with a short position of Century Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortitude Gold and Century Aluminum.
Diversification Opportunities for Fortitude Gold and Century Aluminum
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fortitude and Century is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Fortitude Gold Corp and Century Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Aluminum and Fortitude Gold 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 Fortitude Gold Corp are associated (or correlated) with Century Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Century Aluminum has no effect on the direction of Fortitude Gold i.e., Fortitude Gold and Century Aluminum go up and down completely randomly.
Pair Corralation between Fortitude Gold and Century Aluminum
Given the investment horizon of 90 days Fortitude Gold is expected to generate 8.32 times less return on investment than Century Aluminum. But when comparing it to its historical volatility, Fortitude Gold Corp is 2.57 times less risky than Century Aluminum. It trades about 0.07 of its potential returns per unit of risk. Century Aluminum is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,826 in Century Aluminum on August 26, 2024 and sell it today you would earn a total of 423.00 from holding Century Aluminum or generate 23.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortitude Gold Corp vs. Century Aluminum
Performance |
| Timeline |
| Fortitude Gold Corp |
| Century Aluminum |
Fortitude Gold and Century Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortitude Gold and Century Aluminum
The main advantage of trading using opposite Fortitude Gold and Century Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortitude Gold position performs unexpectedly, Century Aluminum 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 Century Aluminum will offset losses from the drop in Century Aluminum's long position.| Fortitude Gold vs. Generationome Properties | Fortitude Gold vs. Gold Resource | Fortitude Gold vs. PermRock Royalty Trust | Fortitude Gold vs. Ellington Residential Mortgage |
Check out your portfolio center.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 CEOs Directory module to screen CEOs from public companies around the world.
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