Correlation Between Hycroft Mining and Fortitude Gold

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

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

Diversification Opportunities for Hycroft Mining and Fortitude Gold

0.04

Correlation Coefficient

Hycroft Mining  Fortitude Gold

Significant diversification

The 3 months correlation between Hycroft and Fortitude is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Hycroft Mining Holding 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 Hycroft Mining 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 Hycroft Mining Holding 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 Hycroft Mining i.e., Hycroft Mining and Fortitude Gold go up and down completely randomly.

Pair Corralation between Hycroft Mining and Fortitude Gold

Given the investment horizon of 90 days Hycroft Mining Holding is expected to generate 2.41 times more return on investment than Fortitude Gold. However, Hycroft Mining is 2.41 times more volatile than Fortitude Gold Corp. It trades about 0.12 of its potential returns per unit of risk. Fortitude Gold Corp is currently generating about 0.03 per unit of risk. If you would invest  231.00  in Hycroft Mining Holding on December 29, 2024 and sell it today you would earn a total of  75.00  from holding Hycroft Mining Holding or generate 32.47% return on investment over 90 days.

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

Hycroft Mining Holding  vs.  Fortitude Gold Corp

Hycroft Mining Holding

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hycroft Mining Holding are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak primary indicators, Hycroft Mining exhibited solid returns over the last few months and may actually be approaching a breakup point.

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 Hycroft Mining and Fortitude Gold

The main advantage of trading using opposite Hycroft Mining and Fortitude Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hycroft Mining 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 Hycroft Mining Holding 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.