Correlation Between Wheaton Precious and CCL Industries

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

Diversification Opportunities for Wheaton Precious and CCL Industries

0.56

Correlation Coefficient

Wheaton Precious  CCL Industries

Very weak diversification

The 3 months correlation between Wheaton and CCL is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals and CCL Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCL Industries 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 CCL Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCL Industries has no effect on the direction of Wheaton Precious i.e., Wheaton Precious and CCL Industries go up and down completely randomly.

Pair Corralation between Wheaton Precious and CCL Industries

Assuming the 90 days trading horizon Wheaton Precious is expected to generate 3.64 times less return on investment than CCL Industries. In addition to that, Wheaton Precious is 1.71 times more volatile than CCL Industries. It trades about 0.03 of its total potential returns per unit of risk. CCL Industries is currently generating about 0.2 per unit of volatility. If you would invest  6,836  in CCL Industries on April 20, 2025 and sell it today you would earn a total of  1,161  from holding CCL Industries or generate 16.98% 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.  CCL Industries

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 very healthy primary indicators, Wheaton Precious is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

CCL Industries

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CCL Industries are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, CCL Industries unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wheaton Precious and CCL Industries

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

The idea behind Wheaton Precious Metals and CCL Industries 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.