Correlation Between Wizz Air and Wheaton Precious
Can any of the company-specific risk be diversified away by investing in both Wizz Air 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 Wizz Air and Wheaton Precious into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wizz Air Holdings and Wheaton Precious Metals, you can compare the effects of market volatilities on Wizz Air 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 Wizz Air with a short position of Wheaton Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wizz Air and Wheaton Precious.
Diversification Opportunities for Wizz Air and Wheaton Precious
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wizz and Wheaton is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Wizz Air Holdings 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 Wizz Air 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 Wizz Air Holdings 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 Wizz Air i.e., Wizz Air and Wheaton Precious go up and down completely randomly.
Pair Corralation between Wizz Air and Wheaton Precious
Assuming the 90 days trading horizon Wizz Air is expected to generate 1.24 times less return on investment than Wheaton Precious. In addition to that, Wizz Air is 2.67 times more volatile than Wheaton Precious Metals. It trades about 0.08 of its total potential returns per unit of risk. Wheaton Precious Metals is currently generating about 0.26 per unit of volatility. If you would invest 5,478 in Wheaton Precious Metals on December 28, 2024 and sell it today you would earn a total of 1,596 from holding Wheaton Precious Metals or generate 29.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Wizz Air Holdings vs. Wheaton Precious Metals
Performance |
Timeline |
Wizz Air Holdings |
Wheaton Precious Metals |
Wizz Air and Wheaton Precious Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Wizz Air and Wheaton Precious
The main advantage of trading using opposite Wizz Air and Wheaton Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wizz Air 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.Wizz Air vs. Zurich Insurance Group | Wizz Air vs. Selective Insurance Group | Wizz Air vs. Japan Post Insurance | Wizz Air vs. Direct Line Insurance |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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