Correlation Between Bank Rakyat and Fortitude Gold

Can any of the company-specific risk be diversified away by investing in both Bank Rakyat 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 Bank Rakyat and Fortitude Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bank Rakyat and Fortitude Gold Corp, you can compare the effects of market volatilities on Bank Rakyat 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 Bank Rakyat with a short position of Fortitude Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Fortitude Gold.

Diversification Opportunities for Bank Rakyat and Fortitude Gold

0.34

Correlation Coefficient

Bank Rakyat  Fortitude Gold

Weak diversification

The 3 months correlation between Bank and Fortitude is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat 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 Bank Rakyat 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 Bank Rakyat 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 Bank Rakyat i.e., Bank Rakyat and Fortitude Gold go up and down completely randomly.

Pair Corralation between Bank Rakyat and Fortitude Gold

Assuming the 90 days horizon Bank Rakyat is expected to generate 602.0 times less return on investment than Fortitude Gold. In addition to that, Bank Rakyat is 1.58 times more volatile than Fortitude Gold Corp. It trades about 0.0 of its total potential returns per unit of risk. Fortitude Gold Corp is currently generating about 0.03 per unit of volatility. If you would invest  487.00  in Fortitude Gold Corp on December 29, 2024 and sell it today you would earn a total of  12.00  from holding Fortitude Gold Corp or generate 2.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Bank Rakyat  vs.  Fortitude Gold Corp

Bank Rakyat

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bank Rakyat has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward-looking signals, Bank Rakyat is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fortitude Gold Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fortitude Gold Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Fortitude Gold is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Bank Rakyat and Fortitude Gold

The main advantage of trading using opposite Bank Rakyat and Fortitude Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat 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.

The idea behind Bank Rakyat and Fortitude Gold Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.