Correlation Between Oakley Capital and Wheaton Precious

Can any of the company-specific risk be diversified away by investing in both Oakley Capital and Wheaton Precious 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 Oakley Capital and Wheaton Precious into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Oakley Capital Investments and Wheaton Precious Metals, you can compare the effects of market volatilities on Oakley Capital and Wheaton Precious 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 Oakley Capital with a short position of Wheaton Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakley Capital and Wheaton Precious.

Diversification Opportunities for Oakley Capital and Wheaton Precious

-0.37

Correlation Coefficient

Oakley Capital  Wheaton Precious

Very good diversification

The 3 months correlation between Oakley and Wheaton is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Oakley Capital Investments and Wheaton Precious Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wheaton Precious Metals and Oakley Capital 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 Oakley Capital Investments are associated (or correlated) with Wheaton Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wheaton Precious Metals has no effect on the direction of Oakley Capital i.e., Oakley Capital and Wheaton Precious go up and down completely randomly.

Pair Corralation between Oakley Capital and Wheaton Precious

Assuming the 90 days trading horizon Oakley Capital Investments is expected to generate 0.79 times more return on investment than Wheaton Precious. However, Oakley Capital Investments is 1.27 times less risky than Wheaton Precious. It trades about 0.04 of its potential returns per unit of risk. Wheaton Precious Metals is currently generating about -0.18 per unit of risk. If you would invest  49,450  in Oakley Capital Investments on September 21, 2024 and sell it today you would earn a total of  550.00  from holding Oakley Capital Investments or generate 1.11% return on investment over 90 days.

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

Oakley Capital Investments  vs.  Wheaton Precious Metals

Oakley Capital Inves

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oakley Capital Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Oakley Capital is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Wheaton Precious Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wheaton Precious Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Wheaton Precious is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Oakley Capital and Wheaton Precious

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

The idea behind Oakley Capital Investments and Wheaton Precious Metals 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.

Check out your portfolio center.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.