Correlation Between Fortitude Gold and Royal Gold
Can any of the company-specific risk be diversified away by investing in both Fortitude Gold and Royal 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 Royal 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 Royal Gold, you can compare the effects of market volatilities on Fortitude Gold and Royal 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 Royal Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortitude Gold and Royal Gold.
Diversification Opportunities for Fortitude Gold and Royal Gold
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fortitude and Royal is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Fortitude Gold Corp and Royal Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royal Gold 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 Royal Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royal Gold has no effect on the direction of Fortitude Gold i.e., Fortitude Gold and Royal Gold go up and down completely randomly.
Pair Corralation between Fortitude Gold and Royal Gold
Given the investment horizon of 90 days Fortitude Gold Corp is expected to generate 1.23 times more return on investment than Royal Gold. However, Fortitude Gold is 1.23 times more volatile than Royal Gold. It trades about 0.09 of its potential returns per unit of risk. Royal Gold is currently generating about 0.07 per unit of risk. If you would invest 426.00 in Fortitude Gold Corp on September 19, 2024 and sell it today you would earn a total of 96.00 from holding Fortitude Gold Corp or generate 22.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Fortitude Gold Corp vs. Royal Gold
Performance |
| Timeline |
| Fortitude Gold Corp |
| Royal Gold |
Fortitude Gold and Royal Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortitude Gold and Royal Gold
The main advantage of trading using opposite Fortitude Gold and Royal Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortitude Gold position performs unexpectedly, Royal 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 Royal Gold will offset losses from the drop in Royal 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |