Correlation Between SSR Mining and Wheaton Precious

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

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

Diversification Opportunities for SSR Mining and Wheaton Precious

0.82

Correlation Coefficient

SSR Mining  Wheaton Precious

Very poor diversification

The 3 months correlation between SSR and Wheaton is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding SSR Mining 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 SSR Mining 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 SSR Mining 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 SSR Mining i.e., SSR Mining and Wheaton Precious go up and down completely randomly.

Pair Corralation between SSR Mining and Wheaton Precious

Given the investment horizon of 90 days SSR Mining is expected to under-perform the Wheaton Precious. In addition to that, SSR Mining is 2.44 times more volatile than Wheaton Precious Metals. It trades about -0.04 of its total potential returns per unit of risk. Wheaton Precious Metals is currently generating about 0.09 per unit of volatility. If you would invest  4,286  in Wheaton Precious Metals on August 24, 2024 and sell it today you would earn a total of  2,095  from holding Wheaton Precious Metals or generate 48.88% return on investment over 90 days.

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

SSR Mining  vs.  Wheaton Precious Metals

SSR Mining

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SSR Mining are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, SSR Mining may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Wheaton Precious Metals

Risk-Adjusted Performance

2 of 100

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 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.

Pair Trading with SSR Mining and Wheaton Precious

The main advantage of trading using opposite SSR Mining and Wheaton Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSR Mining 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 SSR Mining 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.

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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.