Correlation Between Wheaton Precious and Lindsell Train
Can any of the company-specific risk be diversified away by investing in both Wheaton Precious and Lindsell Train 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 Lindsell Train 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 Lindsell Train Investment, you can compare the effects of market volatilities on Wheaton Precious and Lindsell Train 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 Lindsell Train. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheaton Precious and Lindsell Train.
Diversification Opportunities for Wheaton Precious and Lindsell Train
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wheaton and Lindsell is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals and Lindsell Train Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindsell Train Investment 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 Lindsell Train. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindsell Train Investment has no effect on the direction of Wheaton Precious i.e., Wheaton Precious and Lindsell Train go up and down completely randomly.
Pair Corralation between Wheaton Precious and Lindsell Train
Assuming the 90 days trading horizon Wheaton Precious Metals is expected to generate 1.3 times more return on investment than Lindsell Train. However, Wheaton Precious is 1.3 times more volatile than Lindsell Train Investment. It trades about 0.42 of its potential returns per unit of risk. Lindsell Train Investment is currently generating about 0.05 per unit of risk. If you would invest 476,500 in Wheaton Precious Metals on November 29, 2024 and sell it today you would earn a total of 73,500 from holding Wheaton Precious Metals or generate 15.42% 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. Lindsell Train Investment
Performance |
| Timeline |
| Wheaton Precious Metals |
| Lindsell Train Investment |
Wheaton Precious and Lindsell Train Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wheaton Precious and Lindsell Train
The main advantage of trading using opposite Wheaton Precious and Lindsell Train positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheaton Precious position performs unexpectedly, Lindsell Train 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 Lindsell Train will offset losses from the drop in Lindsell Train's long position.| Wheaton Precious vs. Air Products Chemicals | Wheaton Precious vs. Norwegian Air Shuttle | Wheaton Precious vs. Cornish Metals | Wheaton Precious vs. Bisichi Mining PLC |
| Lindsell Train vs. Resolute Mining Limited | Lindsell Train vs. Endeavour Mining Corp | Lindsell Train vs. Silvercorp Metals | Lindsell Train vs. Pan American Silver |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |