Correlation Between Wheaton Precious and Centamin Plc

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

Diversification Opportunities for Wheaton Precious and Centamin Plc

0.0

Correlation Coefficient

Wheaton Precious  Centamin Plc

Pay attention - limited upside

The 3 months correlation between Wheaton and Centamin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals and Centamin Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centamin 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 Centamin Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centamin Plc has no effect on the direction of Wheaton Precious i.e., Wheaton Precious and Centamin Plc go up and down completely randomly.

Pair Corralation between Wheaton Precious and Centamin Plc

If you would invest  5,608  in Wheaton Precious Metals on December 29, 2024 and sell it today you would earn a total of  2,076  from holding Wheaton Precious Metals or generate 37.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Wheaton Precious Metals  vs.  Centamin Plc

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 25 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Wheaton Precious displayed solid returns over the last few months and may actually be approaching a breakup point.

Centamin Plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Centamin Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Centamin Plc is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Wheaton Precious and Centamin Plc

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

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