Correlation Between Stellar AfricaGold and Franco Nevada
Can any of the company-specific risk be diversified away by investing in both Stellar AfricaGold 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 Stellar AfricaGold and Franco Nevada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stellar AfricaGold and Franco Nevada, you can compare the effects of market volatilities on Stellar AfricaGold 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 Stellar AfricaGold with a short position of Franco Nevada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stellar AfricaGold and Franco Nevada.
Diversification Opportunities for Stellar AfricaGold and Franco Nevada
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Stellar and Franco is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Stellar AfricaGold and Franco Nevada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franco Nevada and Stellar AfricaGold 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 Stellar AfricaGold 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 Stellar AfricaGold i.e., Stellar AfricaGold and Franco Nevada go up and down completely randomly.
Pair Corralation between Stellar AfricaGold and Franco Nevada
If you would invest 10,621 in Franco Nevada on September 4, 2024 and sell it today you would earn a total of 1,516 from holding Franco Nevada or generate 14.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.4% |
| Values | Daily Returns |
Stellar AfricaGold vs. Franco Nevada
Performance |
| Timeline |
| Stellar AfricaGold |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Franco Nevada |
Stellar AfricaGold and Franco Nevada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stellar AfricaGold and Franco Nevada
The main advantage of trading using opposite Stellar AfricaGold and Franco Nevada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stellar AfricaGold 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.| Stellar AfricaGold vs. Franco Nevada | Stellar AfricaGold vs. Wheaton Precious Metals | Stellar AfricaGold vs. Seabridge Gold | Stellar AfricaGold vs. Osisko Gold Ro |
| Franco Nevada vs. Royal Gold | Franco Nevada vs. Agnico Eagle Mines | Franco Nevada vs. Pan American Silver | Franco Nevada vs. Sandstorm Gold Ltd |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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