Correlation Between Wheaton Precious and ZIJIN MINH
Can any of the company-specific risk be diversified away by investing in both Wheaton Precious and ZIJIN MINH 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 Wheaton Precious and ZIJIN MINH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wheaton Precious Metals and ZIJIN MINH UNSPADR20, you can compare the effects of market volatilities on Wheaton Precious and ZIJIN MINH 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 Wheaton Precious with a short position of ZIJIN MINH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheaton Precious and ZIJIN MINH.
Diversification Opportunities for Wheaton Precious and ZIJIN MINH
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wheaton and ZIJIN is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals and ZIJIN MINH UNSPADR20 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZIJIN MINH UNSPADR20 and Wheaton Precious 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 Wheaton Precious Metals are associated (or correlated) with ZIJIN MINH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZIJIN MINH UNSPADR20 has no effect on the direction of Wheaton Precious i.e., Wheaton Precious and ZIJIN MINH go up and down completely randomly.
Pair Corralation between Wheaton Precious and ZIJIN MINH
Assuming the 90 days horizon Wheaton Precious is expected to generate 1.23 times less return on investment than ZIJIN MINH. But when comparing it to its historical volatility, Wheaton Precious Metals is 1.47 times less risky than ZIJIN MINH. It trades about 0.06 of its potential returns per unit of risk. ZIJIN MINH UNSPADR20 is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,364 in ZIJIN MINH UNSPADR20 on September 3, 2024 and sell it today you would earn a total of 1,596 from holding ZIJIN MINH UNSPADR20 or generate 67.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Wheaton Precious Metals vs. ZIJIN MINH UNSPADR20
Performance |
| Timeline |
| Wheaton Precious Metals |
| ZIJIN MINH UNSPADR20 |
Wheaton Precious and ZIJIN MINH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wheaton Precious and ZIJIN MINH
The main advantage of trading using opposite Wheaton Precious and ZIJIN MINH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheaton Precious position performs unexpectedly, ZIJIN MINH 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 ZIJIN MINH will offset losses from the drop in ZIJIN MINH's long position.| Wheaton Precious vs. STRAYER EDUCATION | Wheaton Precious vs. Kaufman Broad SA | Wheaton Precious vs. COPLAND ROAD CAPITAL | Wheaton Precious vs. IDP EDUCATION LTD |
| ZIJIN MINH vs. FEMALE HEALTH | ZIJIN MINH vs. ON SEMICONDUCTOR | ZIJIN MINH vs. Vastned Retail NV | ZIJIN MINH vs. RETAIL FOOD GROUP |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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