Correlation Between Wheaton Precious and Check Point
Can any of the company-specific risk be diversified away by investing in both Wheaton Precious and Check Point 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 Check Point 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 Check Point Software, you can compare the effects of market volatilities on Wheaton Precious and Check Point 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 Check Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheaton Precious and Check Point.
Diversification Opportunities for Wheaton Precious and Check Point
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Wheaton and Check is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals and Check Point Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Check Point Software 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 Check Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Check Point Software has no effect on the direction of Wheaton Precious i.e., Wheaton Precious and Check Point go up and down completely randomly.
Pair Corralation between Wheaton Precious and Check Point
Assuming the 90 days trading horizon Wheaton Precious Metals is expected to generate 1.8 times more return on investment than Check Point. However, Wheaton Precious is 1.8 times more volatile than Check Point Software. It trades about 0.04 of its potential returns per unit of risk. Check Point Software is currently generating about 0.06 per unit of risk. If you would invest 348,301 in Wheaton Precious Metals on August 28, 2024 and sell it today you would earn a total of 147,699 from holding Wheaton Precious Metals or generate 42.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.22% |
| Values | Daily Returns |
Wheaton Precious Metals vs. Check Point Software
Performance |
| Timeline |
| Wheaton Precious Metals |
| Check Point Software |
Wheaton Precious and Check Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wheaton Precious and Check Point
The main advantage of trading using opposite Wheaton Precious and Check Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheaton Precious position performs unexpectedly, Check Point 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 Check Point will offset losses from the drop in Check Point's long position.| Wheaton Precious vs. Atalaya Mining | Wheaton Precious vs. iShares Physical Silver | Wheaton Precious vs. Indutrade AB | Wheaton Precious vs. Anglesey Mining |
| Check Point vs. Toyota Motor Corp | Check Point vs. OTP Bank Nyrt | Check Point vs. Yum Brands | Check Point vs. Cognizant Technology Solutions |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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