Correlation Between Wheaton Precious and Alkane Resources
Can any of the company-specific risk be diversified away by investing in both Wheaton Precious and Alkane Resources 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 Alkane Resources 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 Alkane Resources Limited, you can compare the effects of market volatilities on Wheaton Precious and Alkane Resources 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 Alkane Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheaton Precious and Alkane Resources.
Diversification Opportunities for Wheaton Precious and Alkane Resources
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wheaton and Alkane is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals and Alkane Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alkane Resources 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 Alkane Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alkane Resources has no effect on the direction of Wheaton Precious i.e., Wheaton Precious and Alkane Resources go up and down completely randomly.
Pair Corralation between Wheaton Precious and Alkane Resources
Considering the 90-day investment horizon Wheaton Precious Metals is expected to generate 0.36 times more return on investment than Alkane Resources. However, Wheaton Precious Metals is 2.75 times less risky than Alkane Resources. It trades about 0.06 of its potential returns per unit of risk. Alkane Resources Limited is currently generating about 0.01 per unit of risk. If you would invest 3,817 in Wheaton Precious Metals on September 2, 2024 and sell it today you would earn a total of 2,416 from holding Wheaton Precious Metals or generate 63.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wheaton Precious Metals vs. Alkane Resources Limited
Performance |
| Timeline |
| Wheaton Precious Metals |
| Alkane Resources |
Wheaton Precious and Alkane Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wheaton Precious and Alkane Resources
The main advantage of trading using opposite Wheaton Precious and Alkane Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheaton Precious position performs unexpectedly, Alkane Resources 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 Alkane Resources will offset losses from the drop in Alkane Resources' long position.| Wheaton Precious vs. Fortitude Gold Corp | Wheaton Precious vs. New Gold | Wheaton Precious vs. Galiano Gold | Wheaton Precious vs. GoldMining |
| Alkane Resources vs. Arafura Resources | Alkane Resources vs. Great Western Minerals | Alkane Resources vs. Greenland Minerals And | Alkane Resources vs. Ucore Rare 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |