Correlation Between Fortitude Gold and Eldorado Gold
Can any of the company-specific risk be diversified away by investing in both Fortitude Gold and Eldorado 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 Fortitude Gold and Eldorado Gold 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 Eldorado Gold Corp, you can compare the effects of market volatilities on Fortitude Gold and Eldorado 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 Fortitude Gold with a short position of Eldorado Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortitude Gold and Eldorado Gold.
Diversification Opportunities for Fortitude Gold and Eldorado Gold
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fortitude and Eldorado is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Fortitude Gold Corp and Eldorado Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eldorado Gold Corp 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 Eldorado Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eldorado Gold Corp has no effect on the direction of Fortitude Gold i.e., Fortitude Gold and Eldorado Gold go up and down completely randomly.
Pair Corralation between Fortitude Gold and Eldorado Gold
Given the investment horizon of 90 days Fortitude Gold Corp is expected to generate 0.68 times more return on investment than Eldorado Gold. However, Fortitude Gold Corp is 1.46 times less risky than Eldorado Gold. It trades about 0.05 of its potential returns per unit of risk. Eldorado Gold Corp is currently generating about -0.11 per unit of risk. If you would invest 534.00 in Fortitude Gold Corp on August 29, 2024 and sell it today you would earn a total of 11.00 from holding Fortitude Gold Corp or generate 2.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortitude Gold Corp vs. Eldorado Gold Corp
Performance |
| Timeline |
| Fortitude Gold Corp |
| Eldorado Gold Corp |
Fortitude Gold and Eldorado Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortitude Gold and Eldorado Gold
The main advantage of trading using opposite Fortitude Gold and Eldorado Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortitude Gold position performs unexpectedly, Eldorado 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 Eldorado Gold will offset losses from the drop in Eldorado Gold'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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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