Correlation Between Fortitude Gold and Revival Gold

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

Diversification Opportunities for Fortitude Gold and Revival Gold

0.12

Correlation Coefficient

Fortitude Gold  Revival Gold

Average diversification

The 3 months correlation between Fortitude and Revival is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Fortitude Gold Corp and Revival Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Revival 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 Revival Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Revival Gold has no effect on the direction of Fortitude Gold i.e., Fortitude Gold and Revival Gold go up and down completely randomly.

Pair Corralation between Fortitude Gold and Revival Gold

Given the investment horizon of 90 days Fortitude Gold Corp is expected to under-perform the Revival Gold. But the otc stock apears to be less risky and, when comparing its historical volatility, Fortitude Gold Corp is 2.16 times less risky than Revival Gold. The otc stock trades about -0.21 of its potential returns per unit of risk. The Revival Gold is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  21.00  in Revival Gold on September 17, 2024 and sell it today you would lose (1.00) from holding Revival Gold or give up 4.76% of portfolio value over 90 days.

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

Fortitude Gold Corp  vs.  Revival Gold

Fortitude Gold Corp

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fortitude Gold Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile fundamental indicators, Fortitude Gold displayed solid returns over the last few months and may actually be approaching a breakup point.

Revival Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Revival Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Revival Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Fortitude Gold and Revival Gold

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

The idea behind Fortitude Gold Corp and Revival Gold 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.