Correlation Between Wealthsimple Shariah and Themes Gold

Can any of the company-specific risk be diversified away by investing in both Wealthsimple Shariah and Themes Gold 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 Wealthsimple Shariah and Themes Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Wealthsimple Shariah World and Themes Gold Miners, you can compare the effects of market volatilities on Wealthsimple Shariah and Themes Gold 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 Wealthsimple Shariah with a short position of Themes Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wealthsimple Shariah and Themes Gold.

Diversification Opportunities for Wealthsimple Shariah and Themes Gold

0.27

Correlation Coefficient

Wealthsimple Shariah  Themes Gold

Modest diversification

The 3 months correlation between Wealthsimple and Themes is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Wealthsimple Shariah World and Themes Gold Miners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Themes Gold Miners and Wealthsimple Shariah 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 Wealthsimple Shariah World are associated (or correlated) with Themes Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Themes Gold Miners has no effect on the direction of Wealthsimple Shariah i.e., Wealthsimple Shariah and Themes Gold go up and down completely randomly.

Pair Corralation between Wealthsimple Shariah and Themes Gold

Assuming the 90 days trading horizon Wealthsimple Shariah is expected to generate 42.9 times less return on investment than Themes Gold. But when comparing it to its historical volatility, Wealthsimple Shariah World is 3.94 times less risky than Themes Gold. It trades about 0.01 of its potential returns per unit of risk. Themes Gold Miners is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  7,544  in Themes Gold Miners on September 13, 2025 and sell it today you would earn a total of  1,620  from holding Themes Gold Miners or generate 21.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Wealthsimple Shariah World  vs.  Themes Gold Miners

Wealthsimple Shariah

Risk-Adjusted Performance

Weakest

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

Themes Gold Miners

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Themes Gold Miners are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating primary indicators, Themes Gold demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wealthsimple Shariah and Themes Gold

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

The idea behind Wealthsimple Shariah World and Themes Gold Miners 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .