Correlation Between Aberdeen Diversified and Hochschild Mining
Can any of the company-specific risk be diversified away by investing in both Aberdeen Diversified 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 Aberdeen Diversified and Hochschild Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aberdeen Diversified Income and Hochschild Mining plc, you can compare the effects of market volatilities on Aberdeen Diversified 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 Aberdeen Diversified with a short position of Hochschild Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Diversified and Hochschild Mining.
Diversification Opportunities for Aberdeen Diversified and Hochschild Mining
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aberdeen and Hochschild is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Diversified Income 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 Aberdeen Diversified 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 Aberdeen Diversified Income 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 Aberdeen Diversified i.e., Aberdeen Diversified and Hochschild Mining go up and down completely randomly.
Pair Corralation between Aberdeen Diversified and Hochschild Mining
Assuming the 90 days trading horizon Aberdeen Diversified Income is expected to generate 0.47 times more return on investment than Hochschild Mining. However, Aberdeen Diversified Income is 2.12 times less risky than Hochschild Mining. It trades about 0.01 of its potential returns per unit of risk. Hochschild Mining plc is currently generating about -0.05 per unit of risk. If you would invest 4,310 in Aberdeen Diversified Income on September 20, 2024 and sell it today you would earn a total of 10.00 from holding Aberdeen Diversified Income or generate 0.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberdeen Diversified Income vs. Hochschild Mining plc
Performance |
| Timeline |
| Aberdeen Diversified |
| Hochschild Mining plc |
Aberdeen Diversified and Hochschild Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Diversified and Hochschild Mining
The main advantage of trading using opposite Aberdeen Diversified and Hochschild Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Diversified 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.| Aberdeen Diversified vs. McEwen Mining | Aberdeen Diversified vs. Southern Copper Corp | Aberdeen Diversified vs. Aeorema Communications Plc | Aberdeen Diversified vs. Austevoll Seafood ASA |
| Hochschild Mining vs. New Residential Investment | Hochschild Mining vs. Aberdeen Diversified Income | Hochschild Mining vs. DXC Technology Co | Hochschild Mining vs. TechnipFMC PLC |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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