Correlation Between Equinox Gold and Franco Nevada

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Equinox 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 Equinox 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 Equinox Gold Corp and Franco Nevada, you can compare the effects of market volatilities on Equinox 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 Equinox Gold with a short position of Franco Nevada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equinox Gold and Franco Nevada.

Diversification Opportunities for Equinox Gold and Franco Nevada

EquinoxFrancoDiversified AwayEquinoxFrancoDiversified Away100%
0.92
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Equinox and Franco is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Equinox Gold Corp and Franco Nevada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franco Nevada and Equinox 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 Equinox Gold Corp 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 Equinox Gold i.e., Equinox Gold and Franco Nevada go up and down completely randomly.

Pair Corralation between Equinox Gold and Franco Nevada

Considering the 90-day investment horizon Equinox Gold Corp is expected to generate 2.03 times more return on investment than Franco Nevada. However, Equinox Gold is 2.03 times more volatile than Franco Nevada. It trades about 0.23 of its potential returns per unit of risk. Franco Nevada is currently generating about 0.2 per unit of risk. If you would invest  587.00  in Equinox Gold Corp on November 25, 2024 and sell it today you would earn a total of  95.00  from holding Equinox Gold Corp or generate 16.18% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Equinox Gold Corp  vs.  Franco Nevada

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 0102030
JavaScript chart by amCharts 3.21.15EQX FNV
       Timeline  
Equinox Gold Corp 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Equinox Gold Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Equinox Gold showed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb55.566.57
Franco Nevada 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Franco Nevada are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Franco Nevada showed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb115120125130135140145

Equinox Gold and Franco Nevada Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-10.81-8.1-5.38-2.670.04522.815.718.6111.5114.42 0.020.040.060.080.100.120.14
JavaScript chart by amCharts 3.21.15EQX FNV
       Returns  

Pair Trading with Equinox Gold and Franco Nevada

The main advantage of trading using opposite Equinox Gold and Franco Nevada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equinox 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.
The idea behind Equinox Gold Corp and Franco Nevada pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

Other Complementary Tools

Top Crypto Exchanges
Search and analyze digital assets across top global cryptocurrency exchanges
Fundamental Analysis
View fundamental data based on most recent published financial statements
USA ETFs
Find actively traded Exchange Traded Funds (ETF) in USA
Analyst Advice
Analyst recommendations and target price estimates broken down by several categories
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios


 

Discover investing ideas

Utilize additional investing modules