Correlation Between Plastic Omnium and Wheaton Precious
Can any of the company-specific risk be diversified away by investing in both Plastic Omnium 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 Plastic Omnium and Wheaton Precious into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plastic Omnium and Wheaton Precious Metals, you can compare the effects of market volatilities on Plastic Omnium 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 Plastic Omnium with a short position of Wheaton Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plastic Omnium and Wheaton Precious.
Diversification Opportunities for Plastic Omnium and Wheaton Precious
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Plastic and Wheaton is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Plastic Omnium 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 Plastic Omnium 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 Plastic Omnium 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 Plastic Omnium i.e., Plastic Omnium and Wheaton Precious go up and down completely randomly.
Pair Corralation between Plastic Omnium and Wheaton Precious
Assuming the 90 days trading horizon Plastic Omnium is expected to generate 1.29 times more return on investment than Wheaton Precious. However, Plastic Omnium is 1.29 times more volatile than Wheaton Precious Metals. It trades about 0.07 of its potential returns per unit of risk. Wheaton Precious Metals is currently generating about -0.16 per unit of risk. If you would invest 991.00 in Plastic Omnium on October 16, 2024 and sell it today you would earn a total of 20.00 from holding Plastic Omnium or generate 2.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plastic Omnium vs. Wheaton Precious Metals
Performance |
| Timeline |
| Plastic Omnium |
| Wheaton Precious Metals |
Plastic Omnium and Wheaton Precious Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plastic Omnium and Wheaton Precious
The main advantage of trading using opposite Plastic Omnium and Wheaton Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plastic Omnium 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.| Plastic Omnium vs. Monument Mining Limited | Plastic Omnium vs. Easy Software AG | Plastic Omnium vs. Bio Techne Corp | Plastic Omnium vs. Siamgas And Petrochemicals |
| Wheaton Precious vs. Compagnie Plastic Omnium | Wheaton Precious vs. Heidelberg Materials AG | Wheaton Precious vs. Rayonier Advanced Materials | Wheaton Precious vs. NEWELL RUBBERMAID |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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