Correlation Between AVITA Medical and Hochschild Mining
Can any of the company-specific risk be diversified away by investing in both AVITA Medical 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 AVITA Medical and Hochschild Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AVITA Medical and Hochschild Mining plc, you can compare the effects of market volatilities on AVITA Medical 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 AVITA Medical with a short position of Hochschild Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVITA Medical and Hochschild Mining.
Diversification Opportunities for AVITA Medical and Hochschild Mining
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AVITA and Hochschild is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding AVITA Medical 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 AVITA Medical 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 AVITA Medical 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 AVITA Medical i.e., AVITA Medical and Hochschild Mining go up and down completely randomly.
Pair Corralation between AVITA Medical and Hochschild Mining
Assuming the 90 days trading horizon AVITA Medical is expected to generate 1.33 times more return on investment than Hochschild Mining. However, AVITA Medical is 1.33 times more volatile than Hochschild Mining plc. It trades about 0.22 of its potential returns per unit of risk. Hochschild Mining plc is currently generating about -0.15 per unit of risk. If you would invest 190.00 in AVITA Medical on August 30, 2024 and sell it today you would earn a total of 44.00 from holding AVITA Medical or generate 23.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
AVITA Medical vs. Hochschild Mining plc
Performance |
| Timeline |
| AVITA Medical |
| Hochschild Mining plc |
AVITA Medical and Hochschild Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AVITA Medical and Hochschild Mining
The main advantage of trading using opposite AVITA Medical and Hochschild Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVITA Medical 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.| AVITA Medical vs. Apple Inc | AVITA Medical vs. Apple Inc | AVITA Medical vs. Apple Inc | AVITA Medical vs. Apple Inc |
| 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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