Correlation Between Gold Resource and Fortitude Gold
Can any of the company-specific risk be diversified away by investing in both Gold Resource and Fortitude 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 Gold Resource and Fortitude Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold Resource and Fortitude Gold Corp, you can compare the effects of market volatilities on Gold Resource and Fortitude 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 Gold Resource with a short position of Fortitude Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Resource and Fortitude Gold.
Diversification Opportunities for Gold Resource and Fortitude Gold
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gold and Fortitude is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Gold Resource and Fortitude Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortitude Gold Corp and Gold Resource 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 Gold Resource are associated (or correlated) with Fortitude Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortitude Gold Corp has no effect on the direction of Gold Resource i.e., Gold Resource and Fortitude Gold go up and down completely randomly.
Pair Corralation between Gold Resource and Fortitude Gold
Given the investment horizon of 90 days Gold Resource is expected to generate 10.89 times more return on investment than Fortitude Gold. However, Gold Resource is 10.89 times more volatile than Fortitude Gold Corp. It trades about 0.32 of its potential returns per unit of risk. Fortitude Gold Corp is currently generating about 0.07 per unit of risk. If you would invest 22.00 in Gold Resource on November 2, 2024 and sell it today you would earn a total of 16.00 from holding Gold Resource or generate 72.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold Resource vs. Fortitude Gold Corp
Performance |
| Timeline |
| Gold Resource |
| Fortitude Gold Corp |
Gold Resource and Fortitude Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Resource and Fortitude Gold
The main advantage of trading using opposite Gold Resource and Fortitude Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Resource position performs unexpectedly, Fortitude 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 Fortitude Gold will offset losses from the drop in Fortitude Gold's long position.| Gold Resource vs. IAMGold | Gold Resource vs. Eldorado Gold Corp | Gold Resource vs. Coeur Mining | Gold Resource vs. Alamos Gold |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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