Correlation Between Wheaton Precious and Fortitude Gold
Can any of the company-specific risk be diversified away by investing in both Wheaton Precious 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 Wheaton Precious and Fortitude Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wheaton Precious Metals and Fortitude Gold Corp, you can compare the effects of market volatilities on Wheaton Precious 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 Wheaton Precious with a short position of Fortitude Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheaton Precious and Fortitude Gold.
Diversification Opportunities for Wheaton Precious and Fortitude Gold
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wheaton and Fortitude is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals 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 Wheaton Precious 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 Wheaton Precious Metals 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 Wheaton Precious i.e., Wheaton Precious and Fortitude Gold go up and down completely randomly.
Pair Corralation between Wheaton Precious and Fortitude Gold
Considering the 90-day investment horizon Wheaton Precious Metals is expected to under-perform the Fortitude Gold. In addition to that, Wheaton Precious is 1.16 times more volatile than Fortitude Gold Corp. It trades about -0.16 of its total potential returns per unit of risk. Fortitude Gold Corp is currently generating about -0.02 per unit of volatility. If you would invest 532.00 in Fortitude Gold Corp on August 30, 2024 and sell it today you would lose (7.00) from holding Fortitude Gold Corp or give up 1.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Wheaton Precious Metals vs. Fortitude Gold Corp
Performance |
| Timeline |
| Wheaton Precious Metals |
| Fortitude Gold Corp |
Wheaton Precious and Fortitude Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wheaton Precious and Fortitude Gold
The main advantage of trading using opposite Wheaton Precious and Fortitude Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheaton Precious 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.| Wheaton Precious vs. Franco Nevada | Wheaton Precious vs. Osisko Gold Ro | Wheaton Precious vs. Sandstorm Gold Ltd | Wheaton Precious vs. Royal 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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