Correlation Between PLATO GOLD and Franco Nevada
Can any of the company-specific risk be diversified away by investing in both PLATO GOLD 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 PLATO GOLD and Franco Nevada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PLATO GOLD P and Franco Nevada, you can compare the effects of market volatilities on PLATO GOLD 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 PLATO GOLD with a short position of Franco Nevada. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLATO GOLD and Franco Nevada.
Diversification Opportunities for PLATO GOLD and Franco Nevada
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PLATO and Franco is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding PLATO GOLD P and Franco Nevada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franco Nevada and PLATO GOLD 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 PLATO GOLD P 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 PLATO GOLD i.e., PLATO GOLD and Franco Nevada go up and down completely randomly.
Pair Corralation between PLATO GOLD and Franco Nevada
Assuming the 90 days horizon PLATO GOLD P is expected to generate 44.03 times more return on investment than Franco Nevada. However, PLATO GOLD is 44.03 times more volatile than Franco Nevada. It trades about 0.27 of its potential returns per unit of risk. Franco Nevada is currently generating about 0.23 per unit of risk. If you would invest 0.35 in PLATO GOLD P on September 14, 2024 and sell it today you would earn a total of 0.65 from holding PLATO GOLD P or generate 185.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PLATO GOLD P vs. Franco Nevada
Performance |
| Timeline |
| PLATO GOLD P |
| Franco Nevada |
PLATO GOLD and Franco Nevada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLATO GOLD and Franco Nevada
The main advantage of trading using opposite PLATO GOLD and Franco Nevada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLATO GOLD 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.| PLATO GOLD vs. Franco Nevada | PLATO GOLD vs. Superior Plus Corp | PLATO GOLD vs. SIVERS SEMICONDUCTORS AB | PLATO GOLD vs. Norsk Hydro ASA |
| Franco Nevada vs. Align Technology | Franco Nevada vs. LGI Homes | Franco Nevada vs. INVITATION HOMES DL | Franco Nevada vs. AECOM TECHNOLOGY |
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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