Correlation Between Fortitude Gold and Worthington Steel

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

Diversification Opportunities for Fortitude Gold and Worthington Steel

-0.38

Correlation Coefficient

Fortitude Gold  Worthington Steel

Very good diversification

The 3 months correlation between Fortitude and Worthington is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Fortitude Gold Corp and Worthington Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Worthington Steel 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 Worthington Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Worthington Steel has no effect on the direction of Fortitude Gold i.e., Fortitude Gold and Worthington Steel go up and down completely randomly.

Pair Corralation between Fortitude Gold and Worthington Steel

Given the investment horizon of 90 days Fortitude Gold Corp is expected to under-perform the Worthington Steel. But the otc stock apears to be less risky and, when comparing its historical volatility, Fortitude Gold Corp is 1.0 times less risky than Worthington Steel. The otc stock trades about -0.2 of its potential returns per unit of risk. The Worthington Steel is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest  2,815  in Worthington Steel on December 5, 2024 and sell it today you would lose (221.00) from holding Worthington Steel or give up 7.85% of portfolio value over 90 days.

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

Fortitude Gold Corp  vs.  Worthington Steel

Fortitude Gold Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fortitude Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Worthington Steel

Risk-Adjusted Performance

Very Weak

Over the last 90 days Worthington Steel has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 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 Worthington Steel

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

The idea behind Fortitude Gold Corp and Worthington Steel 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.