Correlation Between Wheaton Precious and Target Healthcare

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

Diversification Opportunities for Wheaton Precious and Target Healthcare

0.59

Correlation Coefficient

Wheaton Precious  Target Healthcare

Very weak diversification

The 3 months correlation between Wheaton and Target is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals and Target Healthcare REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Target Healthcare REIT 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 Target Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Target Healthcare REIT has no effect on the direction of Wheaton Precious i.e., Wheaton Precious and Target Healthcare go up and down completely randomly.

Pair Corralation between Wheaton Precious and Target Healthcare

Assuming the 90 days trading horizon Wheaton Precious Metals is expected to generate 2.03 times more return on investment than Target Healthcare. However, Wheaton Precious is 2.03 times more volatile than Target Healthcare REIT. It trades about 0.03 of its potential returns per unit of risk. Target Healthcare REIT is currently generating about 0.05 per unit of risk. If you would invest  639,768  in Wheaton Precious Metals on April 20, 2025 and sell it today you would earn a total of  17,232  from holding Wheaton Precious Metals or generate 2.69% return on investment over 90 days.

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

Wheaton Precious Metals  vs.  Target Healthcare REIT

Wheaton Precious Metals

Risk-Adjusted Performance

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 rather sound technical and fundamental indicators, Wheaton Precious is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Target Healthcare REIT

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Target Healthcare REIT are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Target Healthcare is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Wheaton Precious and Target Healthcare

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

The idea behind Wheaton Precious Metals and Target Healthcare REIT 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.