Correlation Between BlackRock Frontiers and Wheaton Precious

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

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

Diversification Opportunities for BlackRock Frontiers and Wheaton Precious

-0.47

Correlation Coefficient

BlackRock Frontiers  Wheaton Precious

Very good diversification

The 3 months correlation between BlackRock and Wheaton is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Frontiers Investment 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 BlackRock Frontiers 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 BlackRock Frontiers Investment 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 BlackRock Frontiers i.e., BlackRock Frontiers and Wheaton Precious go up and down completely randomly.

Pair Corralation between BlackRock Frontiers and Wheaton Precious

Assuming the 90 days trading horizon BlackRock Frontiers is expected to generate 1.64 times less return on investment than Wheaton Precious. But when comparing it to its historical volatility, BlackRock Frontiers Investment is 1.98 times less risky than Wheaton Precious. It trades about 0.04 of its potential returns per unit of risk. Wheaton Precious Metals is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  352,182  in Wheaton Precious Metals on October 11, 2024 and sell it today you would earn a total of  113,318  from holding Wheaton Precious Metals or generate 32.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

BlackRock Frontiers Investment  vs.  Wheaton Precious Metals

BlackRock Frontiers

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock Frontiers Investment are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, BlackRock Frontiers may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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 rather sound technical and fundamental indicators, Wheaton Precious is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with BlackRock Frontiers and Wheaton Precious

The main advantage of trading using opposite BlackRock Frontiers and Wheaton Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock Frontiers 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 BlackRock Frontiers Investment 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.