Correlation Between Wheaton Precious and Avidian Gold
Can any of the company-specific risk be diversified away by investing in both Wheaton Precious and Avidian Gold 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 Avidian Gold 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 Avidian Gold Corp, you can compare the effects of market volatilities on Wheaton Precious and Avidian Gold 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 Avidian Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheaton Precious and Avidian Gold.
Diversification Opportunities for Wheaton Precious and Avidian Gold
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Wheaton and Avidian is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals and Avidian Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avidian Gold Corp 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 Avidian Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avidian Gold Corp has no effect on the direction of Wheaton Precious i.e., Wheaton Precious and Avidian Gold go up and down completely randomly.
Pair Corralation between Wheaton Precious and Avidian Gold
Considering the 90-day investment horizon Wheaton Precious Metals is expected to under-perform the Avidian Gold. But the stock apears to be less risky and, when comparing its historical volatility, Wheaton Precious Metals is 8.7 times less risky than Avidian Gold. The stock trades about -0.1 of its potential returns per unit of risk. The Avidian Gold Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 7.41 in Avidian Gold Corp on September 1, 2024 and sell it today you would earn a total of 1.85 from holding Avidian Gold Corp or generate 24.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Wheaton Precious Metals vs. Avidian Gold Corp
Performance |
| Timeline |
| Wheaton Precious Metals |
| Avidian Gold Corp |
Wheaton Precious and Avidian Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wheaton Precious and Avidian Gold
The main advantage of trading using opposite Wheaton Precious and Avidian Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheaton Precious position performs unexpectedly, Avidian Gold 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 Avidian Gold will offset losses from the drop in Avidian Gold's long position.| Wheaton Precious vs. Royal Gold | Wheaton Precious vs. Agnico Eagle Mines | Wheaton Precious vs. Sandstorm Gold Ltd | Wheaton Precious vs. Osisko Gold Ro |
| Avidian Gold vs. Aurion Resources | Avidian Gold vs. Rio2 Limited | Avidian Gold vs. Palamina Corp | Avidian Gold vs. BTU Metals 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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