Correlation Between PLAYMATES TOYS and Hochschild Mining
Can any of the company-specific risk be diversified away by investing in both PLAYMATES TOYS 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 PLAYMATES TOYS and Hochschild Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PLAYMATES TOYS and Hochschild Mining plc, you can compare the effects of market volatilities on PLAYMATES TOYS 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 PLAYMATES TOYS with a short position of Hochschild Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAYMATES TOYS and Hochschild Mining.
Diversification Opportunities for PLAYMATES TOYS and Hochschild Mining
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PLAYMATES and Hochschild is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding PLAYMATES TOYS 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 PLAYMATES TOYS 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 PLAYMATES TOYS 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 PLAYMATES TOYS i.e., PLAYMATES TOYS and Hochschild Mining go up and down completely randomly.
Pair Corralation between PLAYMATES TOYS and Hochschild Mining
Assuming the 90 days trading horizon PLAYMATES TOYS is expected to under-perform the Hochschild Mining. But the stock apears to be less risky and, when comparing its historical volatility, PLAYMATES TOYS is 1.08 times less risky than Hochschild Mining. The stock trades about -0.06 of its potential returns per unit of risk. The Hochschild Mining plc is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 250.00 in Hochschild Mining plc on September 14, 2024 and sell it today you would earn a total of 41.00 from holding Hochschild Mining plc or generate 16.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PLAYMATES TOYS vs. Hochschild Mining plc
Performance |
| Timeline |
| PLAYMATES TOYS |
| Hochschild Mining plc |
PLAYMATES TOYS and Hochschild Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLAYMATES TOYS and Hochschild Mining
The main advantage of trading using opposite PLAYMATES TOYS and Hochschild Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAYMATES TOYS 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.| PLAYMATES TOYS vs. GALENA MINING LTD | PLAYMATES TOYS vs. LION ONE METALS | PLAYMATES TOYS vs. ASSOC BR FOODS | PLAYMATES TOYS vs. TYSON FOODS A |
| Hochschild Mining vs. Eidesvik Offshore ASA | Hochschild Mining vs. Perseus Mining Limited | Hochschild Mining vs. Zijin Mining Group | Hochschild Mining vs. SOLSTAD OFFSHORE NK |
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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