Correlation Between Wheaton Precious and Tamburi Investment

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

Diversification Opportunities for Wheaton Precious and Tamburi Investment

-0.33

Correlation Coefficient

Wheaton Precious  Tamburi Investment

Very good diversification

The 3 months correlation between Wheaton and Tamburi is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals and Tamburi Investment Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tamburi Investment 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 Tamburi Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tamburi Investment has no effect on the direction of Wheaton Precious i.e., Wheaton Precious and Tamburi Investment go up and down completely randomly.

Pair Corralation between Wheaton Precious and Tamburi Investment

Assuming the 90 days trading horizon Wheaton Precious Metals is expected to generate 2.36 times more return on investment than Tamburi Investment. However, Wheaton Precious is 2.36 times more volatile than Tamburi Investment Partners. It trades about 0.06 of its potential returns per unit of risk. Tamburi Investment Partners is currently generating about -0.11 per unit of risk. If you would invest  465,011  in Wheaton Precious Metals on September 12, 2024 and sell it today you would earn a total of  34,989  from holding Wheaton Precious Metals or generate 7.52% 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.  Tamburi Investment Partners

Wheaton Precious Metals

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Wheaton Precious Metals are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Wheaton Precious may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Tamburi Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tamburi Investment Partners has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Wheaton Precious and Tamburi Investment

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

The idea behind Wheaton Precious Metals and Tamburi Investment Partners 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.