Correlation Between Centaur Media and Hochschild Mining
Can any of the company-specific risk be diversified away by investing in both Centaur Media 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 Centaur Media and Hochschild Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centaur Media and Hochschild Mining plc, you can compare the effects of market volatilities on Centaur Media 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 Centaur Media with a short position of Hochschild Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centaur Media and Hochschild Mining.
Diversification Opportunities for Centaur Media and Hochschild Mining
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Centaur and Hochschild is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Centaur Media 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 Centaur Media 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 Centaur Media 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 Centaur Media i.e., Centaur Media and Hochschild Mining go up and down completely randomly.
Pair Corralation between Centaur Media and Hochschild Mining
Assuming the 90 days trading horizon Centaur Media is expected to under-perform the Hochschild Mining. But the stock apears to be less risky and, when comparing its historical volatility, Centaur Media is 1.11 times less risky than Hochschild Mining. The stock trades about -0.15 of its potential returns per unit of risk. The Hochschild Mining plc is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 17,180 in Hochschild Mining plc on September 2, 2024 and sell it today you would earn a total of 4,220 from holding Hochschild Mining plc or generate 24.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centaur Media vs. Hochschild Mining plc
Performance |
| Timeline |
| Centaur Media |
| Hochschild Mining plc |
Centaur Media and Hochschild Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centaur Media and Hochschild Mining
The main advantage of trading using opposite Centaur Media and Hochschild Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centaur Media 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.| Centaur Media vs. FC Investment Trust | Centaur Media vs. MoneysupermarketCom Group PLC | Centaur Media vs. Molson Coors Beverage | Centaur Media vs. CAP LEASE AVIATION |
| Hochschild Mining vs. Givaudan SA | Hochschild Mining vs. Antofagasta PLC | Hochschild Mining vs. Centamin PLC | Hochschild Mining vs. Atalaya Mining |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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