Correlation Between Franco Nevada and Mawson Gold
Can any of the company-specific risk be diversified away by investing in both Franco Nevada and Mawson Gold 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 Mawson Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franco Nevada and Mawson Gold Limited, you can compare the effects of market volatilities on Franco Nevada and Mawson Gold 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 Mawson Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franco Nevada and Mawson Gold.
Diversification Opportunities for Franco Nevada and Mawson Gold
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franco and Mawson is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Franco Nevada and Mawson Gold Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mawson Gold Limited 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 Mawson Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mawson Gold Limited has no effect on the direction of Franco Nevada i.e., Franco Nevada and Mawson Gold go up and down completely randomly.
Pair Corralation between Franco Nevada and Mawson Gold
Assuming the 90 days trading horizon Franco Nevada is expected to generate 0.4 times more return on investment than Mawson Gold. However, Franco Nevada is 2.53 times less risky than Mawson Gold. It trades about 0.35 of its potential returns per unit of risk. Mawson Gold Limited is currently generating about 0.06 per unit of risk. If you would invest 17,448 in Franco Nevada on November 3, 2024 and sell it today you would earn a total of 2,309 from holding Franco Nevada or generate 13.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franco Nevada vs. Mawson Gold Limited
Performance |
| Timeline |
| Franco Nevada |
| Mawson Gold Limited |
Franco Nevada and Mawson Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franco Nevada and Mawson Gold
The main advantage of trading using opposite Franco Nevada and Mawson Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franco Nevada position performs unexpectedly, Mawson Gold 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 Mawson Gold will offset losses from the drop in Mawson Gold's long position.| Franco Nevada vs. Wheaton Precious Metals | Franco Nevada vs. Agnico Eagle Mines | Franco Nevada vs. Alamos Gold | Franco Nevada vs. Osisko Gold Ro |
| Mawson Gold vs. Newmont Goldcorp Corp | Mawson Gold vs. Agnico Eagle Mines | Mawson Gold vs. Barrick Gold Corp | Mawson Gold vs. Wheaton Precious Metals |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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