Correlation Between Centamin PLC and Wheaton Precious
Can any of the company-specific risk be diversified away by investing in both Centamin PLC 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 Centamin PLC and Wheaton Precious into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centamin PLC and Wheaton Precious Metals, you can compare the effects of market volatilities on Centamin PLC 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 Centamin PLC with a short position of Wheaton Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centamin PLC and Wheaton Precious.
Diversification Opportunities for Centamin PLC and Wheaton Precious
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Centamin and Wheaton is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Centamin PLC 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 Centamin PLC 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 Centamin PLC 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 Centamin PLC i.e., Centamin PLC and Wheaton Precious go up and down completely randomly.
Pair Corralation between Centamin PLC and Wheaton Precious
Assuming the 90 days trading horizon Centamin PLC is expected to generate 0.8 times more return on investment than Wheaton Precious. However, Centamin PLC is 1.25 times less risky than Wheaton Precious. It trades about 0.08 of its potential returns per unit of risk. Wheaton Precious Metals is currently generating about 0.05 per unit of risk. If you would invest 8,559 in Centamin PLC on August 28, 2024 and sell it today you would earn a total of 6,041 from holding Centamin PLC or generate 70.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.72% |
| Values | Daily Returns |
Centamin PLC vs. Wheaton Precious Metals
Performance |
| Timeline |
| Centamin PLC |
| Wheaton Precious Metals |
Centamin PLC and Wheaton Precious Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centamin PLC and Wheaton Precious
The main advantage of trading using opposite Centamin PLC and Wheaton Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centamin PLC 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.| Centamin PLC vs. Givaudan SA | Centamin PLC vs. Antofagasta PLC | Centamin PLC vs. Atalaya Mining | Centamin PLC vs. Amaroq Minerals |
| Wheaton Precious vs. Atalaya Mining | Wheaton Precious vs. iShares Physical Silver | Wheaton Precious vs. Indutrade AB | Wheaton Precious vs. Anglesey Mining |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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