Correlation Between Fortitude Gold and Franco Nevada
Can any of the company-specific risk be diversified away by investing in both Fortitude Gold and Franco Nevada 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 Franco Nevada 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 Franco Nevada, you can compare the effects of market volatilities on Fortitude Gold and Franco Nevada 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 Franco Nevada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortitude Gold and Franco Nevada.
Diversification Opportunities for Fortitude Gold and Franco Nevada
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fortitude and Franco is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Fortitude Gold Corp and Franco Nevada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franco Nevada 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 Franco Nevada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franco Nevada has no effect on the direction of Fortitude Gold i.e., Fortitude Gold and Franco Nevada go up and down completely randomly.
Pair Corralation between Fortitude Gold and Franco Nevada
Given the investment horizon of 90 days Fortitude Gold Corp is expected to generate 1.31 times more return on investment than Franco Nevada. However, Fortitude Gold is 1.31 times more volatile than Franco Nevada. It trades about 0.15 of its potential returns per unit of risk. Franco Nevada is currently generating about 0.04 per unit of risk. If you would invest 429.00 in Fortitude Gold Corp on August 31, 2024 and sell it today you would earn a total of 91.00 from holding Fortitude Gold Corp or generate 21.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortitude Gold Corp vs. Franco Nevada
Performance |
| Timeline |
| Fortitude Gold Corp |
| Franco Nevada |
Fortitude Gold and Franco Nevada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortitude Gold and Franco Nevada
The main advantage of trading using opposite Fortitude Gold and Franco Nevada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortitude Gold position performs unexpectedly, Franco Nevada 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 Franco Nevada will offset losses from the drop in Franco Nevada'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 |
| Franco Nevada vs. Royal Gold | Franco Nevada vs. Agnico Eagle Mines | Franco Nevada vs. Pan American Silver | Franco Nevada vs. Sandstorm Gold Ltd |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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