Correlation Between LifeSafe Holdings and Wheaton Precious
Can any of the company-specific risk be diversified away by investing in both LifeSafe Holdings 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 LifeSafe Holdings and Wheaton Precious into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LifeSafe Holdings PLC and Wheaton Precious Metals, you can compare the effects of market volatilities on LifeSafe Holdings 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 LifeSafe Holdings with a short position of Wheaton Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of LifeSafe Holdings and Wheaton Precious.
Diversification Opportunities for LifeSafe Holdings and Wheaton Precious
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between LifeSafe and Wheaton is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding LifeSafe Holdings 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 LifeSafe Holdings 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 LifeSafe Holdings 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 LifeSafe Holdings i.e., LifeSafe Holdings and Wheaton Precious go up and down completely randomly.
Pair Corralation between LifeSafe Holdings and Wheaton Precious
Assuming the 90 days trading horizon LifeSafe Holdings is expected to generate 2.09 times less return on investment than Wheaton Precious. But when comparing it to its historical volatility, LifeSafe Holdings PLC is 1.17 times less risky than Wheaton Precious. It trades about 0.05 of its potential returns per unit of risk. Wheaton Precious Metals is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 430,621 in Wheaton Precious Metals on September 3, 2024 and sell it today you would earn a total of 59,879 from holding Wheaton Precious Metals or generate 13.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LifeSafe Holdings PLC vs. Wheaton Precious Metals
Performance |
| Timeline |
| LifeSafe Holdings PLC |
| Wheaton Precious Metals |
LifeSafe Holdings and Wheaton Precious Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LifeSafe Holdings and Wheaton Precious
The main advantage of trading using opposite LifeSafe Holdings and Wheaton Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LifeSafe Holdings 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.| LifeSafe Holdings vs. Wheaton Precious Metals | LifeSafe Holdings vs. AMG Advanced Metallurgical | LifeSafe Holdings vs. Adriatic Metals | LifeSafe Holdings vs. Air Products Chemicals |
| Wheaton Precious vs. Roper Technologies | Wheaton Precious vs. Microchip Technology | Wheaton Precious vs. Tyson Foods Cl | Wheaton Precious vs. Uber Technologies |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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