Correlation Between Fortitude Gold and AngloGold Ashanti

Can any of the company-specific risk be diversified away by investing in both Fortitude Gold and AngloGold Ashanti 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 AngloGold Ashanti 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 AngloGold Ashanti plc, you can compare the effects of market volatilities on Fortitude Gold and AngloGold Ashanti 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 AngloGold Ashanti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortitude Gold and AngloGold Ashanti.

Diversification Opportunities for Fortitude Gold and AngloGold Ashanti

-0.1

Correlation Coefficient

Fortitude Gold  AngloGold Ashanti

Good diversification

The 3 months correlation between Fortitude and AngloGold is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Fortitude Gold Corp and AngloGold Ashanti plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AngloGold Ashanti plc 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 AngloGold Ashanti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AngloGold Ashanti plc has no effect on the direction of Fortitude Gold i.e., Fortitude Gold and AngloGold Ashanti go up and down completely randomly.

Pair Corralation between Fortitude Gold and AngloGold Ashanti

Given the investment horizon of 90 days Fortitude Gold Corp is expected to generate 0.77 times more return on investment than AngloGold Ashanti. However, Fortitude Gold Corp is 1.3 times less risky than AngloGold Ashanti. It trades about 0.09 of its potential returns per unit of risk. AngloGold Ashanti plc is currently generating about -0.1 per unit of risk. If you would invest  435.00  in Fortitude Gold Corp on September 21, 2024 and sell it today you would earn a total of  64.00  from holding Fortitude Gold Corp or generate 14.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.82%
Values	Daily Returns

Fortitude Gold Corp  vs.  AngloGold Ashanti plc

Fortitude Gold Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fortitude Gold Corp are ranked lower than 1 (%) 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.

AngloGold Ashanti plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AngloGold Ashanti plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Fortitude Gold and AngloGold Ashanti

The main advantage of trading using opposite Fortitude Gold and AngloGold Ashanti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortitude Gold position performs unexpectedly, AngloGold Ashanti 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 AngloGold Ashanti will offset losses from the drop in AngloGold Ashanti's long position.

The idea behind Fortitude Gold Corp and AngloGold Ashanti plc 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.