Correlation Between Wheaton Precious and CANEX Metals
Can any of the company-specific risk be diversified away by investing in both Wheaton Precious and CANEX Metals 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 CANEX Metals 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 CANEX Metals, you can compare the effects of market volatilities on Wheaton Precious and CANEX Metals 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 CANEX Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheaton Precious and CANEX Metals.
Diversification Opportunities for Wheaton Precious and CANEX Metals
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wheaton and CANEX is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals and CANEX Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CANEX Metals 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 CANEX Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CANEX Metals has no effect on the direction of Wheaton Precious i.e., Wheaton Precious and CANEX Metals go up and down completely randomly.
Pair Corralation between Wheaton Precious and CANEX Metals
Considering the 90-day investment horizon Wheaton Precious Metals is expected to generate 5.45 times more return on investment than CANEX Metals. However, Wheaton Precious is 5.45 times more volatile than CANEX Metals. It trades about 0.21 of its potential returns per unit of risk. CANEX Metals is currently generating about -0.22 per unit of risk. If you would invest 5,807 in Wheaton Precious Metals on November 3, 2024 and sell it today you would earn a total of 440.00 from holding Wheaton Precious Metals or generate 7.58% 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. CANEX Metals
Performance |
| Timeline |
| Wheaton Precious Metals |
| CANEX Metals |
Wheaton Precious and CANEX Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wheaton Precious and CANEX Metals
The main advantage of trading using opposite Wheaton Precious and CANEX Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheaton Precious position performs unexpectedly, CANEX Metals 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 CANEX Metals will offset losses from the drop in CANEX Metals' 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 |
| CANEX Metals vs. Antioquia Gold | CANEX Metals vs. Radisson Mining Resources | CANEX Metals vs. Asante Gold | CANEX Metals vs. Baru 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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