Correlation Between Pan American and Wheaton Precious
Can any of the company-specific risk be diversified away by investing in both Pan American 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 Pan American and Wheaton Precious into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pan American Silver and Wheaton Precious Metals, you can compare the effects of market volatilities on Pan American 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 Pan American with a short position of Wheaton Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pan American and Wheaton Precious.
Diversification Opportunities for Pan American and Wheaton Precious
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pan and Wheaton is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Pan American Silver 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 Pan American 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 Pan American Silver 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 Pan American i.e., Pan American and Wheaton Precious go up and down completely randomly.
Pair Corralation between Pan American and Wheaton Precious
Assuming the 90 days trading horizon Pan American Silver is expected to under-perform the Wheaton Precious. In addition to that, Pan American is 1.11 times more volatile than Wheaton Precious Metals. It trades about -0.23 of its total potential returns per unit of risk. Wheaton Precious Metals is currently generating about -0.17 per unit of volatility. If you would invest 9,443 in Wheaton Precious Metals on August 30, 2024 and sell it today you would lose (786.00) from holding Wheaton Precious Metals or give up 8.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pan American Silver vs. Wheaton Precious Metals
Performance |
| Timeline |
| Pan American Silver |
| Wheaton Precious Metals |
Pan American and Wheaton Precious Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pan American and Wheaton Precious
The main advantage of trading using opposite Pan American and Wheaton Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pan American 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.| Pan American vs. Solid Impact Investments | Pan American vs. Upstart Investments | Pan American vs. Brookfield Office Properties | Pan American vs. 2028 Investment Grade |
| Wheaton Precious vs. Franco Nevada | Wheaton Precious vs. Pan American Silver | Wheaton Precious vs. Agnico Eagle Mines | Wheaton Precious vs. Sandstorm Gold Ltd |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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