Correlation Between Franco Nevada and Wheaton Precious
Can any of the company-specific risk be diversified away by investing in both Franco Nevada and Wheaton Precious 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 Wheaton Precious into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franco Nevada and Wheaton Precious Metals, you can compare the effects of market volatilities on Franco Nevada and Wheaton Precious 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 Wheaton Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franco Nevada and Wheaton Precious.
Diversification Opportunities for Franco Nevada and Wheaton Precious
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franco and Wheaton is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Franco Nevada and Wheaton Precious Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wheaton Precious Metals 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 Wheaton Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wheaton Precious Metals has no effect on the direction of Franco Nevada i.e., Franco Nevada and Wheaton Precious go up and down completely randomly.
Pair Corralation between Franco Nevada and Wheaton Precious
Considering the 90-day investment horizon Franco Nevada is expected to generate 1.49 times less return on investment than Wheaton Precious. But when comparing it to its historical volatility, Franco Nevada is 1.2 times less risky than Wheaton Precious. It trades about 0.04 of its potential returns per unit of risk. Wheaton Precious Metals is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 10,646 in Wheaton Precious Metals on September 12, 2025 and sell it today you would earn a total of 637.00 from holding Wheaton Precious Metals or generate 5.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franco Nevada vs. Wheaton Precious Metals
Performance |
| Timeline |
| Franco Nevada |
| Wheaton Precious Metals |
Franco Nevada and Wheaton Precious Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franco Nevada and Wheaton Precious
The main advantage of trading using opposite Franco Nevada and Wheaton Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franco Nevada position performs unexpectedly, Wheaton Precious 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 Wheaton Precious will offset losses from the drop in Wheaton Precious' long position.| Franco Nevada vs. Gold Fields Ltd | Franco Nevada vs. AngloGold Ashanti plc | Franco Nevada vs. Wheaton Precious Metals | Franco Nevada vs. Kinross Gold |
| Wheaton Precious vs. Franco Nevada | Wheaton Precious vs. Gold Fields Ltd | Wheaton Precious vs. AngloGold Ashanti plc | Wheaton Precious vs. Corteva |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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