Correlation Between Wheaton Precious and Fletcher King

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

Diversification Opportunities for Wheaton Precious and Fletcher King

-0.16

Correlation Coefficient

Wheaton Precious  Fletcher King

Good diversification

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

Pair Corralation between Wheaton Precious and Fletcher King

Assuming the 90 days trading horizon Wheaton Precious Metals is expected to under-perform the Fletcher King. In addition to that, Wheaton Precious is 1.27 times more volatile than Fletcher King Plc. It trades about -0.06 of its total potential returns per unit of risk. Fletcher King Plc is currently generating about 0.02 per unit of volatility. If you would invest  3,600  in Fletcher King Plc on October 21, 2024 and sell it today you would earn a total of  50.00  from holding Fletcher King Plc or generate 1.39% return on investment over 90 days.

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

Wheaton Precious Metals  vs.  Fletcher King Plc

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.

Fletcher King Plc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fletcher King Plc 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, Fletcher King is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Wheaton Precious and Fletcher King

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

The idea behind Wheaton Precious Metals and Fletcher King Plc 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.