Correlation Between Wheaton Precious and Alfa Financial
Can any of the company-specific risk be diversified away by investing in both Wheaton Precious and Alfa Financial 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 Alfa Financial 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 Alfa Financial Software, you can compare the effects of market volatilities on Wheaton Precious and Alfa Financial 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 Alfa Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheaton Precious and Alfa Financial.
Diversification Opportunities for Wheaton Precious and Alfa Financial
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Wheaton and Alfa is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals and Alfa Financial Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfa Financial 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 Alfa Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfa Financial Software has no effect on the direction of Wheaton Precious i.e., Wheaton Precious and Alfa Financial go up and down completely randomly.
Pair Corralation between Wheaton Precious and Alfa Financial
Assuming the 90 days trading horizon Wheaton Precious Metals is expected to under-perform the Alfa Financial. But the stock apears to be less risky and, when comparing its historical volatility, Wheaton Precious Metals is 1.2 times less risky than Alfa Financial. The stock trades about -0.1 of its potential returns per unit of risk. The Alfa Financial Software is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 21,350 in Alfa Financial Software on September 1, 2024 and sell it today you would earn a total of 700.00 from holding Alfa Financial Software or generate 3.28% 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. Alfa Financial Software
Performance |
| Timeline |
| Wheaton Precious Metals |
| Alfa Financial Software |
Wheaton Precious and Alfa Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wheaton Precious and Alfa Financial
The main advantage of trading using opposite Wheaton Precious and Alfa Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheaton Precious position performs unexpectedly, Alfa Financial 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 Alfa Financial will offset losses from the drop in Alfa Financial's long position.| Wheaton Precious vs. Schroders Investment Trusts | Wheaton Precious vs. FC Investment Trust | Wheaton Precious vs. Hansa Investment | Wheaton Precious vs. Sligro Food Group |
| Alfa Financial vs. SupplyMe Capital PLC | Alfa Financial vs. Lloyds Banking Group | Alfa Financial vs. Premier African Minerals | Alfa Financial vs. SANTANDER UK 8 |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Stocks Directory Find actively traded stocks across global markets | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |