Correlation Between CHINA HUARONG and Franco Nevada
Can any of the company-specific risk be diversified away by investing in both CHINA HUARONG 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 CHINA HUARONG and Franco Nevada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA HUARONG ENERHD 50 and Franco Nevada, you can compare the effects of market volatilities on CHINA HUARONG 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 CHINA HUARONG with a short position of Franco Nevada. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA HUARONG and Franco Nevada.
Diversification Opportunities for CHINA HUARONG and Franco Nevada
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CHINA and Franco is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding CHINA HUARONG ENERHD 50 and Franco Nevada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franco Nevada and CHINA HUARONG 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 CHINA HUARONG ENERHD 50 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 CHINA HUARONG i.e., CHINA HUARONG and Franco Nevada go up and down completely randomly.
Pair Corralation between CHINA HUARONG and Franco Nevada
If you would invest 13,230 in Franco Nevada on December 5, 2024 and sell it today you would earn a total of 575.00 from holding Franco Nevada or generate 4.35% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
CHINA HUARONG ENERHD 50 vs. Franco Nevada
Performance |
Timeline |
CHINA HUARONG ENERHD |
Franco Nevada |
CHINA HUARONG and Franco Nevada Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CHINA HUARONG and Franco Nevada
The main advantage of trading using opposite CHINA HUARONG and Franco Nevada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA HUARONG 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.CHINA HUARONG vs. Canadian Utilities Limited | CHINA HUARONG vs. Ares Management Corp | CHINA HUARONG vs. Platinum Investment Management | CHINA HUARONG vs. United Utilities Group |
Franco Nevada vs. USWE SPORTS AB | Franco Nevada vs. BAKED GAMES SA | Franco Nevada vs. Columbia Sportswear | Franco Nevada vs. GUILD ESPORTS PLC |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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