Correlation Between Apple and Fortitude Gold

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

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

Diversification Opportunities for Apple and Fortitude Gold

0.53

Correlation Coefficient

Apple  Fortitude Gold

Very weak diversification

The 3 months correlation between Apple and Fortitude is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc 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 Apple 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 Apple Inc 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 Apple i.e., Apple and Fortitude Gold go up and down completely randomly.

Pair Corralation between Apple and Fortitude Gold

Given the investment horizon of 90 days Apple Inc is expected to generate 0.91 times more return on investment than Fortitude Gold. However, Apple Inc is 1.09 times less risky than Fortitude Gold. It trades about -0.04 of its potential returns per unit of risk. Fortitude Gold Corp is currently generating about -0.33 per unit of risk. If you would invest  22,153  in Apple Inc on January 25, 2025 and sell it today you would lose (1,400) from holding Apple Inc or give up 6.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Apple Inc  vs.  Fortitude Gold Corp

Apple Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

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 weak performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in May 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Apple and Fortitude Gold

The main advantage of trading using opposite Apple and Fortitude Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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 Apple Inc 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.