Correlation Between Franco Nevada and Townsquare Media
Can any of the company-specific risk be diversified away by investing in both Franco Nevada and Townsquare Media 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 Franco Nevada and Townsquare Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franco Nevada and Townsquare Media, you can compare the effects of market volatilities on Franco Nevada and Townsquare Media 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 Franco Nevada with a short position of Townsquare Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franco Nevada and Townsquare Media.
Diversification Opportunities for Franco Nevada and Townsquare Media
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franco and Townsquare is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Franco Nevada and Townsquare Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Townsquare Media and Franco Nevada 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 Franco Nevada are associated (or correlated) with Townsquare Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Townsquare Media has no effect on the direction of Franco Nevada i.e., Franco Nevada and Townsquare Media go up and down completely randomly.
Pair Corralation between Franco Nevada and Townsquare Media
Assuming the 90 days horizon Franco Nevada is expected to generate 0.77 times more return on investment than Townsquare Media. However, Franco Nevada is 1.3 times less risky than Townsquare Media. It trades about 0.07 of its potential returns per unit of risk. Townsquare Media is currently generating about -0.04 per unit of risk. If you would invest 11,074 in Franco Nevada on November 3, 2024 and sell it today you would earn a total of 1,566 from holding Franco Nevada or generate 14.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franco Nevada vs. Townsquare Media
Performance |
| Timeline |
| Franco Nevada |
| Townsquare Media |
Franco Nevada and Townsquare Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franco Nevada and Townsquare Media
The main advantage of trading using opposite Franco Nevada and Townsquare Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franco Nevada position performs unexpectedly, Townsquare Media 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 Townsquare Media will offset losses from the drop in Townsquare Media's long position.| Franco Nevada vs. BAKED GAMES SA | Franco Nevada vs. MEDICAL FACILITIES NEW | Franco Nevada vs. FRACTAL GAMING GROUP | Franco Nevada vs. OURGAME INTHOLDL 00005 |
| Townsquare Media vs. ZURICH INSURANCE GROUP | Townsquare Media vs. Pembina Pipeline Corp | Townsquare Media vs. INSURANCE AUST GRP | Townsquare Media vs. SPORTING |
Check out your portfolio center.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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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