Correlation Between Wheaton Precious and Ross Stores
Can any of the company-specific risk be diversified away by investing in both Wheaton Precious and Ross Stores 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 Ross Stores 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 Ross Stores, you can compare the effects of market volatilities on Wheaton Precious and Ross Stores 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 Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheaton Precious and Ross Stores.
Diversification Opportunities for Wheaton Precious and Ross Stores
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wheaton and Ross is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores 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 Ross Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ross Stores has no effect on the direction of Wheaton Precious i.e., Wheaton Precious and Ross Stores go up and down completely randomly.
Pair Corralation between Wheaton Precious and Ross Stores
Assuming the 90 days trading horizon Wheaton Precious Metals is expected to generate 1.85 times more return on investment than Ross Stores. However, Wheaton Precious is 1.85 times more volatile than Ross Stores. It trades about 0.05 of its potential returns per unit of risk. Ross Stores is currently generating about 0.05 per unit of risk. If you would invest 311,433 in Wheaton Precious Metals on September 3, 2024 and sell it today you would earn a total of 179,067 from holding Wheaton Precious Metals or generate 57.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.21% |
| Values | Daily Returns |
Wheaton Precious Metals vs. Ross Stores
Performance |
| Timeline |
| Wheaton Precious Metals |
| Ross Stores |
Wheaton Precious and Ross Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wheaton Precious and Ross Stores
The main advantage of trading using opposite Wheaton Precious and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheaton Precious position performs unexpectedly, Ross Stores 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 Ross Stores will offset losses from the drop in Ross Stores' long position.| Wheaton Precious vs. Roper Technologies | Wheaton Precious vs. Microchip Technology | Wheaton Precious vs. Tyson Foods Cl | Wheaton Precious vs. Uber Technologies |
| Ross Stores vs. Federal Realty Investment | Ross Stores vs. Herald Investment Trust | Ross Stores vs. Taylor Maritime Investments | Ross Stores vs. British American Tobacco |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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