Correlation Between St Galler and Wheaton Precious

Can any of the company-specific risk be diversified away by investing in both St Galler and Wheaton Precious 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 St Galler and Wheaton Precious into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between St Galler Kantonalbank and Wheaton Precious Metals, you can compare the effects of market volatilities on St Galler and Wheaton Precious 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 St Galler with a short position of Wheaton Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of St Galler and Wheaton Precious.

Diversification Opportunities for St Galler and Wheaton Precious

-0.16

Correlation Coefficient

St Galler  Wheaton Precious

Good diversification

The 3 months correlation between 0QQZ and Wheaton is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding St Galler Kantonalbank and Wheaton Precious Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wheaton Precious Metals and St Galler 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 St Galler Kantonalbank are associated (or correlated) with Wheaton Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wheaton Precious Metals has no effect on the direction of St Galler i.e., St Galler and Wheaton Precious go up and down completely randomly.

Pair Corralation between St Galler and Wheaton Precious

Assuming the 90 days trading horizon St Galler Kantonalbank is expected to generate 0.34 times more return on investment than Wheaton Precious. However, St Galler Kantonalbank is 2.93 times less risky than Wheaton Precious. It trades about 0.15 of its potential returns per unit of risk. Wheaton Precious Metals is currently generating about 0.02 per unit of risk. If you would invest  42,150  in St Galler Kantonalbank on October 15, 2024 and sell it today you would earn a total of  2,950  from holding St Galler Kantonalbank or generate 7.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

St Galler Kantonalbank  vs.  Wheaton Precious Metals

St Galler Kantonalbank

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in St Galler Kantonalbank are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, St Galler may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Wheaton Precious Metals

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Wheaton Precious Metals are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Wheaton Precious is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with St Galler and Wheaton Precious

The main advantage of trading using opposite St Galler and Wheaton Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if St Galler position performs unexpectedly, Wheaton Precious 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 Wheaton Precious will offset losses from the drop in Wheaton Precious' long position.

The idea behind St Galler Kantonalbank and Wheaton Precious Metals pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.