Correlation Between Franco Nevada and Hochschild Mining
Can any of the company-specific risk be diversified away by investing in both Franco Nevada 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 Franco Nevada and Hochschild Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franco Nevada and Hochschild Mining plc, you can compare the effects of market volatilities on Franco Nevada 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 Franco Nevada with a short position of Hochschild Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franco Nevada and Hochschild Mining.
Diversification Opportunities for Franco Nevada and Hochschild Mining
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franco and Hochschild is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Franco Nevada 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 Franco Nevada 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 Franco Nevada 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 Franco Nevada i.e., Franco Nevada and Hochschild Mining go up and down completely randomly.
Pair Corralation between Franco Nevada and Hochschild Mining
Assuming the 90 days horizon Franco Nevada is expected to under-perform the Hochschild Mining. But the stock apears to be less risky and, when comparing its historical volatility, Franco Nevada is 1.81 times less risky than Hochschild Mining. The stock trades about -0.19 of its potential returns per unit of risk. The Hochschild Mining plc is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 286.00 in Hochschild Mining plc on August 30, 2024 and sell it today you would lose (23.00) from holding Hochschild Mining plc or give up 8.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franco Nevada vs. Hochschild Mining plc
Performance |
| Timeline |
| Franco Nevada |
| Hochschild Mining plc |
Franco Nevada and Hochschild Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franco Nevada and Hochschild Mining
The main advantage of trading using opposite Franco Nevada and Hochschild Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franco Nevada 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.| Franco Nevada vs. Charter Communications | Franco Nevada vs. Caseys General Stores | Franco Nevada vs. Vastned Retail NV | Franco Nevada vs. National Retail Properties |
| Hochschild Mining vs. EHEALTH | Hochschild Mining vs. AVITA Medical | Hochschild Mining vs. Bumrungrad Hospital Public | Hochschild Mining vs. Cardinal Health |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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