Correlation Between Wheaton Precious and Antofagasta PLC
Can any of the company-specific risk be diversified away by investing in both Wheaton Precious and Antofagasta PLC 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 Antofagasta PLC 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 Antofagasta PLC, you can compare the effects of market volatilities on Wheaton Precious and Antofagasta PLC 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 Antofagasta PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheaton Precious and Antofagasta PLC.
Diversification Opportunities for Wheaton Precious and Antofagasta PLC
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Wheaton and Antofagasta is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals and Antofagasta PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antofagasta PLC 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 Antofagasta PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antofagasta PLC has no effect on the direction of Wheaton Precious i.e., Wheaton Precious and Antofagasta PLC go up and down completely randomly.
Pair Corralation between Wheaton Precious and Antofagasta PLC
Assuming the 90 days trading horizon Wheaton Precious Metals is expected to generate 1.35 times more return on investment than Antofagasta PLC. However, Wheaton Precious is 1.35 times more volatile than Antofagasta PLC. It trades about -0.19 of its potential returns per unit of risk. Antofagasta PLC is currently generating about -0.3 per unit of risk. If you would invest 497,000 in Wheaton Precious Metals on October 9, 2024 and sell it today you would lose (41,500) from holding Wheaton Precious Metals or give up 8.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wheaton Precious Metals vs. Antofagasta PLC
Performance |
| Timeline |
| Wheaton Precious Metals |
| Antofagasta PLC |
Wheaton Precious and Antofagasta PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wheaton Precious and Antofagasta PLC
The main advantage of trading using opposite Wheaton Precious and Antofagasta PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheaton Precious position performs unexpectedly, Antofagasta PLC 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 Antofagasta PLC will offset losses from the drop in Antofagasta PLC's long position.| Wheaton Precious vs. Veolia Environnement VE | Wheaton Precious vs. Ironveld Plc | Wheaton Precious vs. Dentsply Sirona | Wheaton Precious vs. Aeorema Communications Plc |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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