Correlation Between INVITATION HOMES and Franco Nevada
Can any of the company-specific risk be diversified away by investing in both INVITATION HOMES and Franco Nevada 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 INVITATION HOMES and Franco Nevada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INVITATION HOMES DL and Franco Nevada, you can compare the effects of market volatilities on INVITATION HOMES and Franco Nevada 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 INVITATION HOMES with a short position of Franco Nevada. Check out your portfolio center. Please also check ongoing floating volatility patterns of INVITATION HOMES and Franco Nevada.
Diversification Opportunities for INVITATION HOMES and Franco Nevada
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between INVITATION and Franco is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding INVITATION HOMES DL and Franco Nevada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franco Nevada and INVITATION HOMES 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 INVITATION HOMES DL are associated (or correlated) with Franco Nevada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franco Nevada has no effect on the direction of INVITATION HOMES i.e., INVITATION HOMES and Franco Nevada go up and down completely randomly.
Pair Corralation between INVITATION HOMES and Franco Nevada
Assuming the 90 days horizon INVITATION HOMES DL is expected to under-perform the Franco Nevada. But the stock apears to be less risky and, when comparing its historical volatility, INVITATION HOMES DL is 1.34 times less risky than Franco Nevada. The stock trades about -0.01 of its potential returns per unit of risk. The Franco Nevada is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 11,135 in Franco Nevada on October 22, 2024 and sell it today you would earn a total of 1,005 from holding Franco Nevada or generate 9.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INVITATION HOMES DL vs. Franco Nevada
Performance |
| Timeline |
| INVITATION HOMES |
| Franco Nevada |
INVITATION HOMES and Franco Nevada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INVITATION HOMES and Franco Nevada
The main advantage of trading using opposite INVITATION HOMES and Franco Nevada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INVITATION HOMES position performs unexpectedly, Franco Nevada 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 Franco Nevada will offset losses from the drop in Franco Nevada's long position.| INVITATION HOMES vs. AECOM TECHNOLOGY | INVITATION HOMES vs. Madison Square Garden | INVITATION HOMES vs. SPORTING | INVITATION HOMES vs. Sunny Optical Technology |
| Franco Nevada vs. Townsquare Media | Franco Nevada vs. Live Nation Entertainment | Franco Nevada vs. SERI INDUSTRIAL EO | Franco Nevada vs. MAGNUM MINING EXP |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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