Correlation Between Wheaton Precious and Sirius Real

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

Diversification Opportunities for Wheaton Precious and Sirius Real

0.14

Correlation Coefficient

Wheaton Precious  Sirius Real

Average diversification

The 3 months correlation between Wheaton and Sirius is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals and Sirius Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sirius Real Estate 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 Sirius Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sirius Real Estate has no effect on the direction of Wheaton Precious i.e., Wheaton Precious and Sirius Real go up and down completely randomly.

Pair Corralation between Wheaton Precious and Sirius Real

Assuming the 90 days trading horizon Wheaton Precious Metals is expected to generate 2.42 times more return on investment than Sirius Real. However, Wheaton Precious is 2.42 times more volatile than Sirius Real Estate. It trades about 0.15 of its potential returns per unit of risk. Sirius Real Estate is currently generating about 0.01 per unit of risk. If you would invest  510,500  in Wheaton Precious Metals on December 3, 2024 and sell it today you would earn a total of  39,500  from holding Wheaton Precious Metals or generate 7.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Wheaton Precious Metals  vs.  Sirius Real Estate

Wheaton Precious Metals

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Wheaton Precious Metals are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Wheaton Precious may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Sirius Real Estate

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sirius Real Estate 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 Sirius Real

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

The idea behind Wheaton Precious Metals and Sirius Real Estate 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.