Correlation Between Wheaton Precious and Ximen Mining

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

Diversification Opportunities for Wheaton Precious and Ximen Mining

-0.2

Correlation Coefficient

Wheaton Precious  Ximen Mining

Good diversification

The 3 months correlation between Wheaton and Ximen is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals and Ximen Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ximen 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 Ximen Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ximen Mining Corp has no effect on the direction of Wheaton Precious i.e., Wheaton Precious and Ximen Mining go up and down completely randomly.

Pair Corralation between Wheaton Precious and Ximen Mining

Considering the 90-day investment horizon Wheaton Precious Metals is expected to generate 0.28 times more return on investment than Ximen Mining. However, Wheaton Precious Metals is 3.61 times less risky than Ximen Mining. It trades about 0.05 of its potential returns per unit of risk. Ximen Mining Corp is currently generating about -0.02 per unit of risk. If you would invest  5,957  in Wheaton Precious Metals on September 2, 2024 and sell it today you would earn a total of  276.00  from holding Wheaton Precious Metals or generate 4.63% return on investment over 90 days.

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

Wheaton Precious Metals  vs.  Ximen Mining Corp

Wheaton Precious Metals

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Wheaton Precious Metals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Wheaton Precious is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Ximen Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ximen Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's primary indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Wheaton Precious and Ximen Mining

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

The idea behind Wheaton Precious Metals and Ximen 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 CEOs Directory module to screen CEOs from public companies around the world.