Correlation Between Wheaton Precious and STM Group
Can any of the company-specific risk be diversified away by investing in both Wheaton Precious and STM Group 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 STM Group 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 STM Group Plc, you can compare the effects of market volatilities on Wheaton Precious and STM Group 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 STM Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheaton Precious and STM Group.
Diversification Opportunities for Wheaton Precious and STM Group
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Wheaton and STM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals and STM Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STM Group 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 STM Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STM Group Plc has no effect on the direction of Wheaton Precious i.e., Wheaton Precious and STM Group go up and down completely randomly.
Pair Corralation between Wheaton Precious and STM Group
If you would invest 477,969 in Wheaton Precious Metals on August 29, 2024 and sell it today you would earn a total of 9,531 from holding Wheaton Precious Metals or generate 1.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Wheaton Precious Metals vs. STM Group Plc
Performance |
| Timeline |
| Wheaton Precious Metals |
| STM Group Plc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Wheaton Precious and STM Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wheaton Precious and STM Group
The main advantage of trading using opposite Wheaton Precious and STM Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheaton Precious position performs unexpectedly, STM Group 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 STM Group will offset losses from the drop in STM Group's long position.| Wheaton Precious vs. Atalaya Mining | Wheaton Precious vs. Central Asia Metals | Wheaton Precious vs. Anglo Asian Mining | Wheaton Precious vs. Metals Exploration Plc |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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