Correlation Between Wheaton Precious and Auction Technology
Can any of the company-specific risk be diversified away by investing in both Wheaton Precious and Auction Technology 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 Auction Technology 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 Auction Technology Group, you can compare the effects of market volatilities on Wheaton Precious and Auction Technology 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 Auction Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheaton Precious and Auction Technology.
Diversification Opportunities for Wheaton Precious and Auction Technology
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wheaton and Auction is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals and Auction Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auction Technology 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 Auction Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auction Technology has no effect on the direction of Wheaton Precious i.e., Wheaton Precious and Auction Technology go up and down completely randomly.
Pair Corralation between Wheaton Precious and Auction Technology
Assuming the 90 days trading horizon Wheaton Precious Metals is expected to under-perform the Auction Technology. But the stock apears to be less risky and, when comparing its historical volatility, Wheaton Precious Metals is 2.11 times less risky than Auction Technology. The stock trades about -0.1 of its potential returns per unit of risk. The Auction Technology Group is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 45,050 in Auction Technology Group on September 1, 2024 and sell it today you would earn a total of 6,550 from holding Auction Technology Group or generate 14.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wheaton Precious Metals vs. Auction Technology Group
Performance |
| Timeline |
| Wheaton Precious Metals |
| Auction Technology |
Wheaton Precious and Auction Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wheaton Precious and Auction Technology
The main advantage of trading using opposite Wheaton Precious and Auction Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheaton Precious position performs unexpectedly, Auction Technology 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 Auction Technology will offset losses from the drop in Auction Technology'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 |
| Auction Technology vs. SupplyMe Capital PLC | Auction Technology vs. Lloyds Banking Group | Auction Technology vs. Premier African Minerals | Auction Technology 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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