Correlation Between Wheaton Precious and Golden Metal
Can any of the company-specific risk be diversified away by investing in both Wheaton Precious and Golden Metal 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 Golden Metal 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 Golden Metal Resources, you can compare the effects of market volatilities on Wheaton Precious and Golden Metal 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 Golden Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheaton Precious and Golden Metal.
Diversification Opportunities for Wheaton Precious and Golden Metal
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Wheaton and Golden is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals and Golden Metal Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Metal Resources 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 Golden Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Metal Resources has no effect on the direction of Wheaton Precious i.e., Wheaton Precious and Golden Metal go up and down completely randomly.
Pair Corralation between Wheaton Precious and Golden Metal
Assuming the 90 days trading horizon Wheaton Precious is expected to generate 23.16 times less return on investment than Golden Metal. But when comparing it to its historical volatility, Wheaton Precious Metals is 19.82 times less risky than Golden Metal. It trades about 0.05 of its potential returns per unit of risk. Golden Metal Resources is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 9.00 in Golden Metal Resources on September 2, 2024 and sell it today you would earn a total of 3,041 from holding Golden Metal Resources or generate 33788.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 79.72% |
| Values | Daily Returns |
Wheaton Precious Metals vs. Golden Metal Resources
Performance |
| Timeline |
| Wheaton Precious Metals |
| Golden Metal Resources |
Wheaton Precious and Golden Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wheaton Precious and Golden Metal
The main advantage of trading using opposite Wheaton Precious and Golden Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheaton Precious position performs unexpectedly, Golden Metal 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 Golden Metal will offset losses from the drop in Golden Metal's long position.| Wheaton Precious vs. Givaudan SA | Wheaton Precious vs. Antofagasta PLC | Wheaton Precious vs. Centamin PLC | Wheaton Precious vs. Atalaya Mining |
| Golden Metal vs. Fevertree Drinks Plc | Golden Metal vs. Ion Beam Applications | Golden Metal vs. Fidelity National Information | Golden Metal vs. Batm Advanced Communications |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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