Correlation Between Fortitude Gold and Sandstorm Gold
Can any of the company-specific risk be diversified away by investing in both Fortitude Gold and Sandstorm 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 Sandstorm 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 Sandstorm Gold Ltd, you can compare the effects of market volatilities on Fortitude Gold and Sandstorm 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 Sandstorm Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortitude Gold and Sandstorm Gold.
Diversification Opportunities for Fortitude Gold and Sandstorm Gold
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fortitude and Sandstorm is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Fortitude Gold Corp and Sandstorm Gold Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandstorm 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 Sandstorm Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sandstorm Gold has no effect on the direction of Fortitude Gold i.e., Fortitude Gold and Sandstorm Gold go up and down completely randomly.
Pair Corralation between Fortitude Gold and Sandstorm Gold
Given the investment horizon of 90 days Fortitude Gold is expected to generate 19.28 times less return on investment than Sandstorm Gold. But when comparing it to its historical volatility, Fortitude Gold Corp is 1.15 times less risky than Sandstorm Gold. It trades about 0.0 of its potential returns per unit of risk. Sandstorm Gold Ltd is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 494.00 in Sandstorm Gold Ltd on November 30, 2024 and sell it today you would earn a total of 119.00 from holding Sandstorm Gold Ltd or generate 24.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortitude Gold Corp vs. Sandstorm Gold Ltd
Performance |
| Timeline |
| Fortitude Gold Corp |
| Sandstorm Gold |
Fortitude Gold and Sandstorm Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortitude Gold and Sandstorm Gold
The main advantage of trading using opposite Fortitude Gold and Sandstorm Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortitude Gold position performs unexpectedly, Sandstorm 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 Sandstorm Gold will offset losses from the drop in Sandstorm 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 |
| Sandstorm Gold vs. Franco Nevada | Sandstorm Gold vs. Royal Gold | Sandstorm Gold vs. Alamos Gold | Sandstorm Gold vs. Seabridge Gold |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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