Correlation Between Wheaton Precious and Ametek

Can any of the company-specific risk be diversified away by investing in both Wheaton Precious and Ametek 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 Ametek 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 Ametek Inc, you can compare the effects of market volatilities on Wheaton Precious and Ametek 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 Ametek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheaton Precious and Ametek.

Diversification Opportunities for Wheaton Precious and Ametek

-0.2

Correlation Coefficient

Wheaton Precious  Ametek

Good diversification

The 3 months correlation between Wheaton and Ametek is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals and Ametek Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ametek Inc 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 Ametek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ametek Inc has no effect on the direction of Wheaton Precious i.e., Wheaton Precious and Ametek go up and down completely randomly.

Pair Corralation between Wheaton Precious and Ametek

Assuming the 90 days trading horizon Wheaton Precious Metals is expected to generate 2.09 times more return on investment than Ametek. However, Wheaton Precious is 2.09 times more volatile than Ametek Inc. It trades about 0.05 of its potential returns per unit of risk. Ametek Inc is currently generating about 0.04 per unit of risk. If you would invest  329,038  in Wheaton Precious Metals on October 24, 2024 and sell it today you would earn a total of  156,962  from holding Wheaton Precious Metals or generate 47.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.48%
Values	Daily Returns

Wheaton Precious Metals  vs.  Ametek Inc

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.

Ametek Inc

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ametek Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Ametek may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Wheaton Precious and Ametek

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

The idea behind Wheaton Precious Metals and Ametek Inc 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.