Correlation Between Wheaton Precious and LifeSafe Holdings
Can any of the company-specific risk be diversified away by investing in both Wheaton Precious and LifeSafe Holdings 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 LifeSafe Holdings 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 LifeSafe Holdings PLC, you can compare the effects of market volatilities on Wheaton Precious and LifeSafe Holdings 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 LifeSafe Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheaton Precious and LifeSafe Holdings.
Diversification Opportunities for Wheaton Precious and LifeSafe Holdings
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Wheaton and LifeSafe is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals and LifeSafe Holdings PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LifeSafe Holdings 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 LifeSafe Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LifeSafe Holdings PLC has no effect on the direction of Wheaton Precious i.e., Wheaton Precious and LifeSafe Holdings go up and down completely randomly.
Pair Corralation between Wheaton Precious and LifeSafe Holdings
Assuming the 90 days trading horizon Wheaton Precious Metals is expected to generate 0.65 times more return on investment than LifeSafe Holdings. However, Wheaton Precious Metals is 1.53 times less risky than LifeSafe Holdings. It trades about 0.05 of its potential returns per unit of risk. LifeSafe Holdings PLC is currently generating about -0.06 per unit of risk. If you would invest 311,433 in Wheaton Precious Metals on September 3, 2024 and sell it today you would earn a total of 179,067 from holding Wheaton Precious Metals or generate 57.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Wheaton Precious Metals vs. LifeSafe Holdings PLC
Performance |
| Timeline |
| Wheaton Precious Metals |
| LifeSafe Holdings PLC |
Wheaton Precious and LifeSafe Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wheaton Precious and LifeSafe Holdings
The main advantage of trading using opposite Wheaton Precious and LifeSafe Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheaton Precious position performs unexpectedly, LifeSafe Holdings 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 LifeSafe Holdings will offset losses from the drop in LifeSafe Holdings' long position.| Wheaton Precious vs. Roper Technologies | Wheaton Precious vs. Microchip Technology | Wheaton Precious vs. Tyson Foods Cl | Wheaton Precious vs. Uber Technologies |
| LifeSafe Holdings vs. Wheaton Precious Metals | LifeSafe Holdings vs. AMG Advanced Metallurgical | LifeSafe Holdings vs. Adriatic Metals | LifeSafe Holdings vs. Air Products Chemicals |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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