Correlation Between Franco Nevada and VanEck Junior
Can any of the company-specific risk be diversified away by investing in both Franco Nevada and VanEck Junior 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 VanEck Junior into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franco Nevada and VanEck Junior Gold, you can compare the effects of market volatilities on Franco Nevada and VanEck Junior 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 VanEck Junior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franco Nevada and VanEck Junior.
Diversification Opportunities for Franco Nevada and VanEck Junior
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franco and VanEck is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Franco Nevada and VanEck Junior Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Junior Gold 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 VanEck Junior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Junior Gold has no effect on the direction of Franco Nevada i.e., Franco Nevada and VanEck Junior go up and down completely randomly.
Pair Corralation between Franco Nevada and VanEck Junior
Considering the 90-day investment horizon Franco Nevada is expected to generate 1.84 times less return on investment than VanEck Junior. But when comparing it to its historical volatility, Franco Nevada is 1.31 times less risky than VanEck Junior. It trades about 0.04 of its potential returns per unit of risk. VanEck Junior Gold is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,579 in VanEck Junior Gold on September 4, 2024 and sell it today you would earn a total of 1,107 from holding VanEck Junior Gold or generate 30.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franco Nevada vs. VanEck Junior Gold
Performance |
| Timeline |
| Franco Nevada |
| VanEck Junior Gold |
Franco Nevada and VanEck Junior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franco Nevada and VanEck Junior
The main advantage of trading using opposite Franco Nevada and VanEck Junior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franco Nevada position performs unexpectedly, VanEck Junior 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 VanEck Junior will offset losses from the drop in VanEck Junior's long position.| Franco Nevada vs. Royal Gold | Franco Nevada vs. Agnico Eagle Mines | Franco Nevada vs. Pan American Silver | Franco Nevada vs. Sandstorm Gold Ltd |
| VanEck Junior vs. VanEck Gold Miners | VanEck Junior vs. Global X Silver | VanEck Junior vs. Amplify ETF Trust | VanEck Junior vs. Pan American Silver |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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