Correlation Between Wheaton Precious and Ferrexpo PLC
Can any of the company-specific risk be diversified away by investing in both Wheaton Precious and Ferrexpo 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 Ferrexpo 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 Ferrexpo PLC, you can compare the effects of market volatilities on Wheaton Precious and Ferrexpo 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 Ferrexpo PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheaton Precious and Ferrexpo PLC.
Diversification Opportunities for Wheaton Precious and Ferrexpo PLC
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Wheaton and Ferrexpo is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals and Ferrexpo PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ferrexpo 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 Ferrexpo PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ferrexpo PLC has no effect on the direction of Wheaton Precious i.e., Wheaton Precious and Ferrexpo PLC go up and down completely randomly.
Pair Corralation between Wheaton Precious and Ferrexpo PLC
Assuming the 90 days trading horizon Wheaton Precious Metals is expected to under-perform the Ferrexpo PLC. But the stock apears to be less risky and, when comparing its historical volatility, Wheaton Precious Metals is 4.48 times less risky than Ferrexpo PLC. The stock trades about -0.09 of its potential returns per unit of risk. The Ferrexpo PLC is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 6,560 in Ferrexpo PLC on September 2, 2024 and sell it today you would earn a total of 1,570 from holding Ferrexpo PLC or generate 23.93% 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. Ferrexpo PLC
Performance |
| Timeline |
| Wheaton Precious Metals |
| Ferrexpo PLC |
Wheaton Precious and Ferrexpo PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wheaton Precious and Ferrexpo PLC
The main advantage of trading using opposite Wheaton Precious and Ferrexpo PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheaton Precious position performs unexpectedly, Ferrexpo 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 Ferrexpo PLC will offset losses from the drop in Ferrexpo PLC's long position.| Wheaton Precious vs. Givaudan SA | Wheaton Precious vs. Antofagasta PLC | Wheaton Precious vs. Centamin PLC | Wheaton Precious vs. Atalaya Mining |
| Ferrexpo PLC vs. McEwen Mining | Ferrexpo PLC vs. Sabre Insurance Group | Ferrexpo PLC vs. Wheaton Precious Metals | Ferrexpo PLC vs. Samsung Electronics Co |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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