Correlation Between Wheaton Precious and Liontrust Asset

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

Diversification Opportunities for Wheaton Precious and Liontrust Asset

-0.18

Correlation Coefficient

Wheaton Precious  Liontrust Asset

Good diversification

The 3 months correlation between Wheaton and Liontrust is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals and Liontrust Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liontrust Asset Mana 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 Liontrust Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liontrust Asset Mana has no effect on the direction of Wheaton Precious i.e., Wheaton Precious and Liontrust Asset go up and down completely randomly.

Pair Corralation between Wheaton Precious and Liontrust Asset

Assuming the 90 days trading horizon Wheaton Precious Metals is expected to generate 0.86 times more return on investment than Liontrust Asset. However, Wheaton Precious Metals is 1.16 times less risky than Liontrust Asset. It trades about 0.01 of its potential returns per unit of risk. Liontrust Asset Management is currently generating about -0.04 per unit of risk. If you would invest  467,503  in Wheaton Precious Metals on October 4, 2024 and sell it today you would lose (1,503) from holding Wheaton Precious Metals or give up 0.32% of portfolio value over 90 days.

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

Wheaton Precious Metals  vs.  Liontrust Asset Management

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.

Liontrust Asset Mana

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Liontrust Asset Management 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 Wheaton Precious and Liontrust Asset

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

The idea behind Wheaton Precious Metals and Liontrust Asset Management 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.