Correlation Between Newmont and Franco Nevada
Can any of the company-specific risk be diversified away by investing in both Newmont 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 Newmont and Franco Nevada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newmont and Franco Nevada, you can compare the effects of market volatilities on Newmont 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 Newmont with a short position of Franco Nevada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newmont and Franco Nevada.
Diversification Opportunities for Newmont and Franco Nevada
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Newmont and Franco is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Newmont and Franco Nevada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franco Nevada and Newmont 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 Newmont 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 Newmont i.e., Newmont and Franco Nevada go up and down completely randomly.
Pair Corralation between Newmont and Franco Nevada
Assuming the 90 days horizon Newmont is expected to generate 121.47 times less return on investment than Franco Nevada. In addition to that, Newmont is 1.11 times more volatile than Franco Nevada. It trades about 0.0 of its total potential returns per unit of risk. Franco Nevada is currently generating about 0.31 per unit of volatility. If you would invest 10,687 in Franco Nevada on September 15, 2024 and sell it today you would earn a total of 1,113 from holding Franco Nevada or generate 10.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Newmont vs. Franco Nevada
Performance |
| Timeline |
| Newmont |
| Franco Nevada |
Newmont and Franco Nevada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newmont and Franco Nevada
The main advantage of trading using opposite Newmont and Franco Nevada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newmont 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.| Newmont vs. Franco Nevada | Newmont vs. Superior Plus Corp | Newmont vs. SIVERS SEMICONDUCTORS AB | Newmont vs. Norsk Hydro ASA |
| Franco Nevada vs. Cogent Communications Holdings | Franco Nevada vs. COMBA TELECOM SYST | Franco Nevada vs. Charter Communications | Franco Nevada vs. MINCO 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |