Correlation Between Wheaton Precious and FC Investment
Can any of the company-specific risk be diversified away by investing in both Wheaton Precious and FC Investment 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 FC Investment 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 FC Investment Trust, you can compare the effects of market volatilities on Wheaton Precious and FC Investment 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 FC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheaton Precious and FC Investment.
Diversification Opportunities for Wheaton Precious and FC Investment
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Wheaton and FCIT is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals and FC Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FC Investment Trust 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 FC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FC Investment Trust has no effect on the direction of Wheaton Precious i.e., Wheaton Precious and FC Investment go up and down completely randomly.
Pair Corralation between Wheaton Precious and FC Investment
Assuming the 90 days trading horizon Wheaton Precious Metals is expected to generate 2.97 times more return on investment than FC Investment. However, Wheaton Precious is 2.97 times more volatile than FC Investment Trust. It trades about 0.04 of its potential returns per unit of risk. FC Investment Trust is currently generating about 0.05 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wheaton Precious Metals vs. FC Investment Trust
Performance |
| Timeline |
| Wheaton Precious Metals |
| FC Investment Trust |
Wheaton Precious and FC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wheaton Precious and FC Investment
The main advantage of trading using opposite Wheaton Precious and FC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheaton Precious position performs unexpectedly, FC Investment 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 FC Investment will offset losses from the drop in FC Investment'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 |
| FC Investment vs. Cornish Metals | FC Investment vs. Teradata Corp | FC Investment vs. Alliance Data Systems | FC Investment vs. Coeur Mining |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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