Correlation Between Wheaton Precious and National Bank
Can any of the company-specific risk be diversified away by investing in both Wheaton Precious and National Bank 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 National Bank 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 National Bank of, you can compare the effects of market volatilities on Wheaton Precious and National Bank 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 National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheaton Precious and National Bank.
Diversification Opportunities for Wheaton Precious and National Bank
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Wheaton and National is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals and National Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank 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 National Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Bank has no effect on the direction of Wheaton Precious i.e., Wheaton Precious and National Bank go up and down completely randomly.
Pair Corralation between Wheaton Precious and National Bank
Assuming the 90 days trading horizon Wheaton Precious Metals is expected to generate 2.05 times more return on investment than National Bank. However, Wheaton Precious is 2.05 times more volatile than National Bank of. It trades about 0.05 of its potential returns per unit of risk. National Bank of is currently generating about 0.04 per unit of risk. If you would invest 348,594 in Wheaton Precious Metals on September 4, 2024 and sell it today you would earn a total of 136,406 from holding Wheaton Precious Metals or generate 39.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wheaton Precious Metals vs. National Bank of
Performance |
| Timeline |
| Wheaton Precious Metals |
| National Bank |
Wheaton Precious and National Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wheaton Precious and National Bank
The main advantage of trading using opposite Wheaton Precious and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheaton Precious position performs unexpectedly, National Bank 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 National Bank will offset losses from the drop in National Bank's long position.| Wheaton Precious vs. Givaudan SA | Wheaton Precious vs. Antofagasta PLC | Wheaton Precious vs. Atalaya Mining | Wheaton Precious vs. Ferrexpo PLC |
| National Bank vs. Batm Advanced Communications | National Bank vs. Aeorema Communications Plc | National Bank vs. Spirent Communications plc | National Bank vs. Lindsell Train Investment |
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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