Correlation Between Wheaton Precious and Public Storage
Can any of the company-specific risk be diversified away by investing in both Wheaton Precious and Public Storage 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 Public Storage 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 Public Storage, you can compare the effects of market volatilities on Wheaton Precious and Public Storage 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 Public Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheaton Precious and Public Storage.
Diversification Opportunities for Wheaton Precious and Public Storage
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wheaton and Public is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals and Public Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Storage 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 Public Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Storage has no effect on the direction of Wheaton Precious i.e., Wheaton Precious and Public Storage go up and down completely randomly.
Pair Corralation between Wheaton Precious and Public Storage
Assuming the 90 days trading horizon Wheaton Precious Metals is expected to generate 1.61 times more return on investment than Public Storage. However, Wheaton Precious is 1.61 times more volatile than Public Storage. It trades about 0.2 of its potential returns per unit of risk. Public Storage is currently generating about -0.03 per unit of risk. If you would invest 448,500 in Wheaton Precious Metals on October 29, 2024 and sell it today you would earn a total of 27,500 from holding Wheaton Precious Metals or generate 6.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wheaton Precious Metals vs. Public Storage
Performance |
| Timeline |
| Wheaton Precious Metals |
| Public Storage |
Wheaton Precious and Public Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wheaton Precious and Public Storage
The main advantage of trading using opposite Wheaton Precious and Public Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheaton Precious position performs unexpectedly, Public Storage 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 Public Storage will offset losses from the drop in Public Storage's long position.| Wheaton Precious vs. Atalaya Mining | Wheaton Precious vs. Adriatic Metals | Wheaton Precious vs. Sabre Insurance Group | Wheaton Precious vs. Fulcrum Metals PLC |
| Public Storage vs. Eastman Chemical Co | Public Storage vs. Fevertree Drinks Plc | Public Storage vs. International Biotechnology Trust | Public Storage vs. Monster Beverage Corp |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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