Correlation Between Franco Nevada and Zhaojin Mining
Can any of the company-specific risk be diversified away by investing in both Franco Nevada and Zhaojin Mining 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 Zhaojin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franco Nevada and Zhaojin Mining Industry, you can compare the effects of market volatilities on Franco Nevada and Zhaojin Mining 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 Zhaojin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franco Nevada and Zhaojin Mining.
Diversification Opportunities for Franco Nevada and Zhaojin Mining
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Franco and Zhaojin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Franco Nevada and Zhaojin Mining Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhaojin Mining Industry 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 Zhaojin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhaojin Mining Industry has no effect on the direction of Franco Nevada i.e., Franco Nevada and Zhaojin Mining go up and down completely randomly.
Pair Corralation between Franco Nevada and Zhaojin Mining
Considering the 90-day investment horizon Franco Nevada is expected to generate 147.17 times less return on investment than Zhaojin Mining. But when comparing it to its historical volatility, Franco Nevada is 1.91 times less risky than Zhaojin Mining. It trades about 0.0 of its potential returns per unit of risk. Zhaojin Mining Industry is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 125.00 in Zhaojin Mining Industry on November 28, 2024 and sell it today you would earn a total of 23.00 from holding Zhaojin Mining Industry or generate 18.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 16.49% |
| Values | Daily Returns |
Franco Nevada vs. Zhaojin Mining Industry
Performance |
| Timeline |
| Franco Nevada |
| Zhaojin Mining Industry |
Franco Nevada and Zhaojin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franco Nevada and Zhaojin Mining
The main advantage of trading using opposite Franco Nevada and Zhaojin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franco Nevada position performs unexpectedly, Zhaojin Mining 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 Zhaojin Mining will offset losses from the drop in Zhaojin Mining'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 |
| Zhaojin Mining vs. Franco Nevada | Zhaojin Mining vs. Wheaton Precious Metals | Zhaojin Mining vs. Seabridge Gold | Zhaojin Mining 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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