Correlation Between Fortitude Gold and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Fortitude Gold and Harmony 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 Harmony 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 Harmony Gold Mining, you can compare the effects of market volatilities on Fortitude Gold and Harmony 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 Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortitude Gold and Harmony Gold.
Diversification Opportunities for Fortitude Gold and Harmony Gold
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fortitude and Harmony is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Fortitude Gold Corp and Harmony Gold Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harmony Gold Mining 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 Harmony Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harmony Gold Mining has no effect on the direction of Fortitude Gold i.e., Fortitude Gold and Harmony Gold go up and down completely randomly.
Pair Corralation between Fortitude Gold and Harmony Gold
Given the investment horizon of 90 days Fortitude Gold Corp is expected to generate 0.59 times more return on investment than Harmony Gold. However, Fortitude Gold Corp is 1.69 times less risky than Harmony Gold. It trades about 0.0 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about -0.28 per unit of risk. If you would invest 532.00 in Fortitude Gold Corp on August 30, 2024 and sell it today you would lose (2.00) from holding Fortitude Gold Corp or give up 0.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortitude Gold Corp vs. Harmony Gold Mining
Performance |
| Timeline |
| Fortitude Gold Corp |
| Harmony Gold Mining |
Fortitude Gold and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortitude Gold and Harmony Gold
The main advantage of trading using opposite Fortitude Gold and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortitude Gold position performs unexpectedly, Harmony 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 Harmony Gold will offset losses from the drop in Harmony 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 |
| Harmony Gold vs. AngloGold Ashanti plc | Harmony Gold vs. Eldorado Gold Corp | Harmony Gold vs. Kinross Gold | Harmony Gold vs. Pan American Silver |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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