Correlation Between BH Macro and Wheaton Precious

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

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

Diversification Opportunities for BH Macro and Wheaton Precious

-0.27

Correlation Coefficient

BH Macro  Wheaton Precious

Very good diversification

The 3 months correlation between BHMU and Wheaton is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding BH Macro Limited 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 BH Macro 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 BH Macro Limited 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 BH Macro i.e., BH Macro and Wheaton Precious go up and down completely randomly.

Pair Corralation between BH Macro and Wheaton Precious

Assuming the 90 days trading horizon BH Macro is expected to generate 37.87 times less return on investment than Wheaton Precious. But when comparing it to its historical volatility, BH Macro Limited is 3.24 times less risky than Wheaton Precious. It trades about 0.01 of its potential returns per unit of risk. Wheaton Precious Metals is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  618,808  in Wheaton Precious Metals on April 24, 2025 and sell it today you would earn a total of  87,192  from holding Wheaton Precious Metals or generate 14.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

BH Macro Limited  vs.  Wheaton Precious Metals

BH Macro Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days BH Macro Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, BH Macro is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Wheaton Precious Metals

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Wheaton Precious Metals are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Wheaton Precious exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BH Macro and Wheaton Precious

The main advantage of trading using opposite BH Macro and Wheaton Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BH Macro 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 BH Macro Limited 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.