Correlation Between Wheaton Precious and Sabien Technology
Can any of the company-specific risk be diversified away by investing in both Wheaton Precious and Sabien Technology 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 Sabien Technology 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 Sabien Technology Group, you can compare the effects of market volatilities on Wheaton Precious and Sabien Technology 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 Sabien Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheaton Precious and Sabien Technology.
Diversification Opportunities for Wheaton Precious and Sabien Technology
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Wheaton and Sabien is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals and Sabien Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabien Technology 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 Sabien Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabien Technology has no effect on the direction of Wheaton Precious i.e., Wheaton Precious and Sabien Technology go up and down completely randomly.
Pair Corralation between Wheaton Precious and Sabien Technology
Assuming the 90 days trading horizon Wheaton Precious is expected to generate 2.56 times less return on investment than Sabien Technology. But when comparing it to its historical volatility, Wheaton Precious Metals is 1.83 times less risky than Sabien Technology. It trades about 0.12 of its potential returns per unit of risk. Sabien Technology Group is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 975.00 in Sabien Technology Group on September 14, 2024 and sell it today you would earn a total of 125.00 from holding Sabien Technology Group or generate 12.82% 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. Sabien Technology Group
Performance |
| Timeline |
| Wheaton Precious Metals |
| Sabien Technology |
Wheaton Precious and Sabien Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wheaton Precious and Sabien Technology
The main advantage of trading using opposite Wheaton Precious and Sabien Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheaton Precious position performs unexpectedly, Sabien Technology 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 Sabien Technology will offset losses from the drop in Sabien Technology's long position.| Wheaton Precious vs. Givaudan SA | Wheaton Precious vs. Antofagasta PLC | Wheaton Precious vs. Ferrexpo PLC | Wheaton Precious vs. Atalaya Mining |
| Sabien Technology vs. GreenX Metals | Sabien Technology vs. Ocean Harvest Technology | Sabien Technology vs. Vitec Software Group | Sabien Technology vs. Wheaton Precious Metals |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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