Correlation Between Wheaton Precious and Lundin Mining
Can any of the company-specific risk be diversified away by investing in both Wheaton Precious and Lundin Mining 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 Lundin Mining 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 Lundin Mining, you can compare the effects of market volatilities on Wheaton Precious and Lundin Mining 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 Lundin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheaton Precious and Lundin Mining.
Diversification Opportunities for Wheaton Precious and Lundin Mining
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wheaton and Lundin is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals and Lundin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Mining 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 Lundin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lundin Mining has no effect on the direction of Wheaton Precious i.e., Wheaton Precious and Lundin Mining go up and down completely randomly.
Pair Corralation between Wheaton Precious and Lundin Mining
Assuming the 90 days trading horizon Wheaton Precious Metals is expected to under-perform the Lundin Mining. But the stock apears to be less risky and, when comparing its historical volatility, Wheaton Precious Metals is 1.27 times less risky than Lundin Mining. The stock trades about -0.1 of its potential returns per unit of risk. The Lundin Mining is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 1,417 in Lundin Mining on August 29, 2024 and sell it today you would lose (49.00) from holding Lundin Mining or give up 3.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wheaton Precious Metals vs. Lundin Mining
Performance |
| Timeline |
| Wheaton Precious Metals |
| Lundin Mining |
Wheaton Precious and Lundin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wheaton Precious and Lundin Mining
The main advantage of trading using opposite Wheaton Precious and Lundin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheaton Precious position performs unexpectedly, Lundin Mining 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 Lundin Mining will offset losses from the drop in Lundin Mining's long position.| Wheaton Precious vs. Franco Nevada | Wheaton Precious vs. Pan American Silver | Wheaton Precious vs. Agnico Eagle Mines | Wheaton Precious vs. Sandstorm Gold Ltd |
| Lundin Mining vs. HudBay Minerals | Lundin Mining vs. First Quantum Minerals | Lundin Mining vs. Ivanhoe Mines | Lundin Mining vs. Capstone Mining Corp |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |