Correlation Between Franco Nevada and Newmont
Can any of the company-specific risk be diversified away by investing in both Franco Nevada and Newmont 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 Newmont into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franco Nevada and Newmont, you can compare the effects of market volatilities on Franco Nevada and Newmont 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 Newmont. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franco Nevada and Newmont.
Diversification Opportunities for Franco Nevada and Newmont
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franco and Newmont is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Franco Nevada and Newmont in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmont 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 Newmont. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newmont has no effect on the direction of Franco Nevada i.e., Franco Nevada and Newmont go up and down completely randomly.
Pair Corralation between Franco Nevada and Newmont
Assuming the 90 days horizon Franco Nevada is expected to generate 0.9 times more return on investment than Newmont. However, Franco Nevada is 1.11 times less risky than Newmont. It trades about 0.31 of its potential returns per unit of risk. Newmont is currently generating about 0.0 per unit of risk. If you would invest 10,687 in Franco Nevada on September 15, 2024 and sell it today you would earn a total of 1,113 from holding Franco Nevada or generate 10.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Franco Nevada vs. Newmont
Performance |
| Timeline |
| Franco Nevada |
| Newmont |
Franco Nevada and Newmont Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franco Nevada and Newmont
The main advantage of trading using opposite Franco Nevada and Newmont positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franco Nevada position performs unexpectedly, Newmont 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 Newmont will offset losses from the drop in Newmont's long position.| Franco Nevada vs. Cogent Communications Holdings | Franco Nevada vs. COMBA TELECOM SYST | Franco Nevada vs. Charter Communications | Franco Nevada vs. MINCO SILVER |
| Newmont vs. Franco Nevada | Newmont vs. Superior Plus Corp | Newmont vs. SIVERS SEMICONDUCTORS AB | Newmont vs. Norsk Hydro ASA |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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