Correlation Between Beeks Trading and Wheaton Precious

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

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

Diversification Opportunities for Beeks Trading and Wheaton Precious

-0.39

Correlation Coefficient

Beeks Trading  Wheaton Precious

Very good diversification

The 3 months correlation between Beeks and Wheaton is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Beeks Trading 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 Beeks Trading 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 Beeks Trading 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 Beeks Trading i.e., Beeks Trading and Wheaton Precious go up and down completely randomly.

Pair Corralation between Beeks Trading and Wheaton Precious

Assuming the 90 days trading horizon Beeks Trading is expected to generate 1.53 times more return on investment than Wheaton Precious. However, Beeks Trading is 1.53 times more volatile than Wheaton Precious Metals. It trades about 0.07 of its potential returns per unit of risk. Wheaton Precious Metals is currently generating about -0.05 per unit of risk. If you would invest  23,700  in Beeks Trading on October 26, 2024 and sell it today you would earn a total of  2,800  from holding Beeks Trading or generate 11.81% return on investment over 90 days.

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

Beeks Trading  vs.  Wheaton Precious Metals

Beeks Trading

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Beeks Trading are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Beeks Trading exhibited solid returns over the last few months and may actually be approaching a breakup point.

Wheaton Precious Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wheaton Precious Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Beeks Trading and Wheaton Precious

The main advantage of trading using opposite Beeks Trading and Wheaton Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beeks Trading 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 Beeks Trading 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.