Correlation Between Wheaton Precious and Newcore Gold
Can any of the company-specific risk be diversified away by investing in both Wheaton Precious and Newcore 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 Newcore 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 Newcore Gold, you can compare the effects of market volatilities on Wheaton Precious and Newcore 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 Newcore Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheaton Precious and Newcore Gold.
Diversification Opportunities for Wheaton Precious and Newcore Gold
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wheaton and Newcore is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals and Newcore Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newcore Gold 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 Newcore Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newcore Gold has no effect on the direction of Wheaton Precious i.e., Wheaton Precious and Newcore Gold go up and down completely randomly.
Pair Corralation between Wheaton Precious and Newcore Gold
Considering the 90-day investment horizon Wheaton Precious is expected to generate 3.08 times less return on investment than Newcore Gold. But when comparing it to its historical volatility, Wheaton Precious Metals is 1.94 times less risky than Newcore Gold. It trades about 0.14 of its potential returns per unit of risk. Newcore Gold is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 22.00 in Newcore Gold on November 2, 2024 and sell it today you would earn a total of 3.00 from holding Newcore Gold or generate 13.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Wheaton Precious Metals vs. Newcore Gold
Performance |
| Timeline |
| Wheaton Precious Metals |
| Newcore Gold |
Wheaton Precious and Newcore Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wheaton Precious and Newcore Gold
The main advantage of trading using opposite Wheaton Precious and Newcore Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheaton Precious position performs unexpectedly, Newcore 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 Newcore Gold will offset losses from the drop in Newcore Gold's long position.| Wheaton Precious vs. Agnico Eagle Mines | Wheaton Precious vs. Pan American Silver | Wheaton Precious vs. Kinross Gold | Wheaton Precious vs. Newmont Goldcorp Corp |
| Newcore Gold vs. Almadex Minerals | Newcore Gold vs. Revival Gold | Newcore Gold vs. Galiano Gold | Newcore Gold vs. US Gold 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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