Correlation Between McEwen Mining and Hochschild Mining
Can any of the company-specific risk be diversified away by investing in both McEwen Mining and Hochschild Mining 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 McEwen Mining and Hochschild Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McEwen Mining and Hochschild Mining plc, you can compare the effects of market volatilities on McEwen Mining and Hochschild Mining 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 McEwen Mining with a short position of Hochschild Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and Hochschild Mining.
Diversification Opportunities for McEwen Mining and Hochschild Mining
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between McEwen and Hochschild is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and Hochschild Mining plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hochschild Mining plc and McEwen 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 McEwen Mining are associated (or correlated) with Hochschild Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hochschild Mining plc has no effect on the direction of McEwen Mining i.e., McEwen Mining and Hochschild Mining go up and down completely randomly.
Pair Corralation between McEwen Mining and Hochschild Mining
Assuming the 90 days trading horizon McEwen Mining is expected to generate 3.53 times less return on investment than Hochschild Mining. In addition to that, McEwen Mining is 1.2 times more volatile than Hochschild Mining plc. It trades about 0.03 of its total potential returns per unit of risk. Hochschild Mining plc is currently generating about 0.12 per unit of volatility. If you would invest 9,900 in Hochschild Mining plc on September 2, 2024 and sell it today you would earn a total of 11,500 from holding Hochschild Mining plc or generate 116.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.81% |
| Values | Daily Returns |
McEwen Mining vs. Hochschild Mining plc
Performance |
| Timeline |
| McEwen Mining |
| Hochschild Mining plc |
McEwen Mining and Hochschild Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and Hochschild Mining
The main advantage of trading using opposite McEwen Mining and Hochschild Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, Hochschild Mining 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 Hochschild Mining will offset losses from the drop in Hochschild Mining's long position.| McEwen Mining vs. Uniper SE | McEwen Mining vs. Mulberry Group PLC | McEwen Mining vs. London Security Plc | McEwen Mining vs. Triad Group PLC |
| Hochschild Mining vs. Givaudan SA | Hochschild Mining vs. Antofagasta PLC | Hochschild Mining vs. Centamin PLC | Hochschild Mining vs. Atalaya Mining |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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