Correlation Between Wheaton Precious and Advanced Medical
Can any of the company-specific risk be diversified away by investing in both Wheaton Precious and Advanced Medical 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 Advanced Medical 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 Advanced Medical Solutions, you can compare the effects of market volatilities on Wheaton Precious and Advanced Medical 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 Advanced Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheaton Precious and Advanced Medical.
Diversification Opportunities for Wheaton Precious and Advanced Medical
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Wheaton and Advanced is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals and Advanced Medical Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Medical Sol 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 Advanced Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Medical Sol has no effect on the direction of Wheaton Precious i.e., Wheaton Precious and Advanced Medical go up and down completely randomly.
Pair Corralation between Wheaton Precious and Advanced Medical
Assuming the 90 days trading horizon Wheaton Precious Metals is expected to generate 1.0 times more return on investment than Advanced Medical. However, Wheaton Precious Metals is 1.0 times less risky than Advanced Medical. It trades about 0.04 of its potential returns per unit of risk. Advanced Medical Solutions is currently generating about -0.01 per unit of risk. If you would invest 342,480 in Wheaton Precious Metals on October 30, 2024 and sell it today you would earn a total of 128,520 from holding Wheaton Precious Metals or generate 37.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Wheaton Precious Metals vs. Advanced Medical Solutions
Performance |
| Timeline |
| Wheaton Precious Metals |
| Advanced Medical Sol |
Wheaton Precious and Advanced Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wheaton Precious and Advanced Medical
The main advantage of trading using opposite Wheaton Precious and Advanced Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheaton Precious position performs unexpectedly, Advanced Medical 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 Advanced Medical will offset losses from the drop in Advanced Medical's long position.| Wheaton Precious vs. Air Products Chemicals | Wheaton Precious vs. Sealed Air Corp | Wheaton Precious vs. Capital Metals PLC | Wheaton Precious vs. Fair Oaks Income |
| Advanced Medical vs. Ryanair Holdings plc | Advanced Medical vs. Fair Oaks Income | Advanced Medical vs. TBC Bank Group | Advanced Medical vs. Wizz Air Holdings |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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