Correlation Between Wheaton Precious and State Bank

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

Diversification Opportunities for Wheaton Precious and State Bank

-0.43

Correlation Coefficient

Wheaton Precious  State Bank

Very good diversification

The 3 months correlation between Wheaton and State is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals and State Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Bank 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 State Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Bank has no effect on the direction of Wheaton Precious i.e., Wheaton Precious and State Bank go up and down completely randomly.

Pair Corralation between Wheaton Precious and State Bank

Assuming the 90 days trading horizon Wheaton Precious Metals is expected to generate 1.6 times more return on investment than State Bank. However, Wheaton Precious is 1.6 times more volatile than State Bank of. It trades about 0.21 of its potential returns per unit of risk. State Bank of is currently generating about -0.02 per unit of risk. If you would invest  448,500  in Wheaton Precious Metals on December 30, 2024 and sell it today you would earn a total of  147,500  from holding Wheaton Precious Metals or generate 32.89% return on investment over 90 days.

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

Wheaton Precious Metals  vs.  State Bank of

Wheaton Precious Metals

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Wheaton Precious Metals are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Wheaton Precious exhibited solid returns over the last few months and may actually be approaching a breakup point.

State Bank

Risk-Adjusted Performance

Very Weak

Over the last 90 days State Bank of has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, State Bank is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Wheaton Precious and State Bank

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

The idea behind Wheaton Precious Metals and State Bank of 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.