Correlation Between Franco Nevada and Pan American
Can any of the company-specific risk be diversified away by investing in both Franco Nevada and Pan American 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 Pan American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franco Nevada and Pan American Silver, you can compare the effects of market volatilities on Franco Nevada and Pan American 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 Pan American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franco Nevada and Pan American.
Diversification Opportunities for Franco Nevada and Pan American
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franco and Pan is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Franco Nevada and Pan American Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan American Silver 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 Pan American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan American Silver has no effect on the direction of Franco Nevada i.e., Franco Nevada and Pan American go up and down completely randomly.
Pair Corralation between Franco Nevada and Pan American
Considering the 90-day investment horizon Franco Nevada is expected to generate 4.3 times less return on investment than Pan American. But when comparing it to its historical volatility, Franco Nevada is 1.49 times less risky than Pan American. It trades about 0.07 of its potential returns per unit of risk. Pan American Silver is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2,606 in Pan American Silver on June 2, 2025 and sell it today you would earn a total of 786.00 from holding Pan American Silver or generate 30.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franco Nevada vs. Pan American Silver
Performance |
| Timeline |
| Franco Nevada |
| Pan American Silver |
Franco Nevada and Pan American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franco Nevada and Pan American
The main advantage of trading using opposite Franco Nevada and Pan American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franco Nevada position performs unexpectedly, Pan American 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 Pan American will offset losses from the drop in Pan American's long position.| Franco Nevada vs. Gold Resource | Franco Nevada vs. McEwen Mining | Franco Nevada vs. Paramount Gold Nevada | Franco Nevada vs. Vista Gold |
| Pan American vs. Agnico Eagle Mines | Pan American vs. First Majestic Silver | Pan American vs. Coeur Mining | Pan American vs. Gold Fields 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |