Correlation Between Wheaton Precious and Gaztransport
Can any of the company-specific risk be diversified away by investing in both Wheaton Precious and Gaztransport 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 Gaztransport 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 Gaztransport et Technigaz, you can compare the effects of market volatilities on Wheaton Precious and Gaztransport 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 Gaztransport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheaton Precious and Gaztransport.
Diversification Opportunities for Wheaton Precious and Gaztransport
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Wheaton and Gaztransport is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals and Gaztransport et Technigaz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport et Technigaz 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 Gaztransport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport et Technigaz has no effect on the direction of Wheaton Precious i.e., Wheaton Precious and Gaztransport go up and down completely randomly.
Pair Corralation between Wheaton Precious and Gaztransport
Assuming the 90 days trading horizon Wheaton Precious Metals is expected to generate 1.78 times more return on investment than Gaztransport. However, Wheaton Precious is 1.78 times more volatile than Gaztransport et Technigaz. It trades about 0.04 of its potential returns per unit of risk. Gaztransport et Technigaz is currently generating about 0.04 per unit of risk. If you would invest 436,673 in Wheaton Precious Metals on August 30, 2024 and sell it today you would earn a total of 48,827 from holding Wheaton Precious Metals or generate 11.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wheaton Precious Metals vs. Gaztransport et Technigaz
Performance |
| Timeline |
| Wheaton Precious Metals |
| Gaztransport et Technigaz |
Wheaton Precious and Gaztransport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wheaton Precious and Gaztransport
The main advantage of trading using opposite Wheaton Precious and Gaztransport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheaton Precious position performs unexpectedly, Gaztransport 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 Gaztransport will offset losses from the drop in Gaztransport's long position.| Wheaton Precious vs. Givaudan SA | Wheaton Precious vs. Antofagasta PLC | Wheaton Precious vs. Centamin PLC | Wheaton Precious vs. Atalaya Mining |
| Gaztransport vs. Tungsten West PLC | Gaztransport vs. Argo Group Limited | Gaztransport vs. Hardide PLC | Gaztransport vs. Versarien PLC |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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