Correlation Between Franco Nevada and Stellar AfricaGold
Can any of the company-specific risk be diversified away by investing in both Franco Nevada and Stellar AfricaGold 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 Stellar AfricaGold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franco Nevada and Stellar AfricaGold, you can compare the effects of market volatilities on Franco Nevada and Stellar AfricaGold 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 Stellar AfricaGold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franco Nevada and Stellar AfricaGold.
Diversification Opportunities for Franco Nevada and Stellar AfricaGold
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franco and Stellar is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Franco Nevada and Stellar AfricaGold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stellar AfricaGold 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 Stellar AfricaGold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stellar AfricaGold has no effect on the direction of Franco Nevada i.e., Franco Nevada and Stellar AfricaGold go up and down completely randomly.
Pair Corralation between Franco Nevada and Stellar AfricaGold
If you would invest 2.28 in Stellar AfricaGold on September 4, 2024 and sell it today you would earn a total of 0.00 from holding Stellar AfricaGold or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Franco Nevada vs. Stellar AfricaGold
Performance |
| Timeline |
| Franco Nevada |
| Stellar AfricaGold |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Franco Nevada and Stellar AfricaGold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franco Nevada and Stellar AfricaGold
The main advantage of trading using opposite Franco Nevada and Stellar AfricaGold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franco Nevada position performs unexpectedly, Stellar AfricaGold 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 Stellar AfricaGold will offset losses from the drop in Stellar AfricaGold'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 |
| Stellar AfricaGold vs. Franco Nevada | Stellar AfricaGold vs. Wheaton Precious Metals | Stellar AfricaGold vs. Seabridge Gold | Stellar AfricaGold vs. Osisko Gold Ro |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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