Correlation Between Franco Nevada and Alithya Group

Can any of the company-specific risk be diversified away by investing in both Franco Nevada and Alithya Group 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 Alithya Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Franco Nevada and Alithya Group inc, you can compare the effects of market volatilities on Franco Nevada and Alithya Group 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 Alithya Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franco Nevada and Alithya Group.

Diversification Opportunities for Franco Nevada and Alithya Group

-0.54

Correlation Coefficient

Franco Nevada  Alithya Group

Excellent diversification

The 3 months correlation between Franco and Alithya is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Franco Nevada and Alithya Group inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alithya Group inc 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 Alithya Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alithya Group inc has no effect on the direction of Franco Nevada i.e., Franco Nevada and Alithya Group go up and down completely randomly.

Pair Corralation between Franco Nevada and Alithya Group

Assuming the 90 days trading horizon Franco Nevada is expected to under-perform the Alithya Group. But the stock apears to be less risky and, when comparing its historical volatility, Franco Nevada is 1.86 times less risky than Alithya Group. The stock trades about -0.09 of its potential returns per unit of risk. The Alithya Group inc is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  180.00  in Alithya Group inc on April 23, 2025 and sell it today you would earn a total of  55.00  from holding Alithya Group inc or generate 30.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Franco Nevada  vs.  Alithya Group inc

Franco Nevada

Risk-Adjusted Performance

Very Weak

Over the last 90 days Franco Nevada has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Alithya Group inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Alithya Group inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Alithya Group displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Franco Nevada and Alithya Group

The main advantage of trading using opposite Franco Nevada and Alithya Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franco Nevada position performs unexpectedly, Alithya Group 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 Alithya Group will offset losses from the drop in Alithya Group's long position.

The idea behind Franco Nevada and Alithya Group inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.