Correlation Between Wheaton Precious and Goldbank Mining

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

Diversification Opportunities for Wheaton Precious and Goldbank Mining

-0.24

Correlation Coefficient

Wheaton Precious  Goldbank Mining

Very good diversification

The 3 months correlation between Wheaton and Goldbank is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals and Goldbank Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldbank Mining Corp 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 Goldbank Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldbank Mining Corp has no effect on the direction of Wheaton Precious i.e., Wheaton Precious and Goldbank Mining go up and down completely randomly.

Pair Corralation between Wheaton Precious and Goldbank Mining

If you would invest  18.00  in Goldbank Mining Corp on October 5, 2024 and sell it today you would earn a total of  0.00  from holding Goldbank Mining Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Wheaton Precious Metals  vs.  Goldbank Mining Corp

Wheaton Precious Metals

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Wheaton Precious Metals are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy primary indicators, Wheaton Precious is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Goldbank Mining Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Goldbank Mining Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Goldbank Mining may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Wheaton Precious and Goldbank Mining

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

The idea behind Wheaton Precious Metals and Goldbank Mining Corp 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.