Correlation Between Caseys General and Franco Nevada
Can any of the company-specific risk be diversified away by investing in both Caseys General 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 Caseys General and Franco Nevada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caseys General Stores and Franco Nevada, you can compare the effects of market volatilities on Caseys General 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 Caseys General with a short position of Franco Nevada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and Franco Nevada.
Diversification Opportunities for Caseys General and Franco Nevada
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Caseys and Franco is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and Franco Nevada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franco Nevada and Caseys General 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 Caseys General Stores 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 Caseys General i.e., Caseys General and Franco Nevada go up and down completely randomly.
Pair Corralation between Caseys General and Franco Nevada
Assuming the 90 days trading horizon Caseys General is expected to generate 2.06 times less return on investment than Franco Nevada. In addition to that, Caseys General is 1.19 times more volatile than Franco Nevada. It trades about 0.1 of its total potential returns per unit of risk. Franco Nevada is currently generating about 0.25 per unit of volatility. If you would invest 12,170 in Franco Nevada on November 28, 2024 and sell it today you would earn a total of 1,020 from holding Franco Nevada or generate 8.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caseys General Stores vs. Franco Nevada
Performance |
| Timeline |
| Caseys General Stores |
| Franco Nevada |
Caseys General and Franco Nevada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caseys General and Franco Nevada
The main advantage of trading using opposite Caseys General and Franco Nevada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General 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.| Caseys General vs. TIANDE CHEMICAL | Caseys General vs. Eastman Chemical | Caseys General vs. Transportadora de Gas | Caseys General vs. GUILD ESPORTS PLC |
| Franco Nevada vs. ZIJIN MINH UNSPADR20 | Franco Nevada vs. Agnico Eagle Mines | Franco Nevada vs. Superior Plus Corp | Franco Nevada vs. Origin Agritech |
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.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Transaction History View history of all your transactions and understand their impact on performance |