Correlation Between Apple and HOCHSCHILD MINING
Can any of the company-specific risk be diversified away by investing in both Apple 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 Apple and HOCHSCHILD MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and HOCHSCHILD MINING, you can compare the effects of market volatilities on Apple 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 Apple with a short position of HOCHSCHILD MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and HOCHSCHILD MINING.
Diversification Opportunities for Apple and HOCHSCHILD MINING
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Apple and HOCHSCHILD is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and HOCHSCHILD MINING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HOCHSCHILD MINING and Apple 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 Apple Inc 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 has no effect on the direction of Apple i.e., Apple and HOCHSCHILD MINING go up and down completely randomly.
Pair Corralation between Apple and HOCHSCHILD MINING
Assuming the 90 days trading horizon Apple is expected to generate 2.68 times less return on investment than HOCHSCHILD MINING. But when comparing it to its historical volatility, Apple Inc is 2.33 times less risky than HOCHSCHILD MINING. It trades about 0.08 of its potential returns per unit of risk. HOCHSCHILD MINING is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 78.00 in HOCHSCHILD MINING on August 28, 2024 and sell it today you would earn a total of 186.00 from holding HOCHSCHILD MINING or generate 238.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. HOCHSCHILD MINING
Performance |
| Timeline |
| Apple Inc |
| HOCHSCHILD MINING |
Apple and HOCHSCHILD MINING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and HOCHSCHILD MINING
The main advantage of trading using opposite Apple and HOCHSCHILD MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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.The idea behind Apple Inc and HOCHSCHILD MINING pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| HOCHSCHILD MINING vs. Apple Inc | HOCHSCHILD MINING vs. Apple Inc | HOCHSCHILD MINING vs. Apple Inc | HOCHSCHILD MINING vs. Microsoft |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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