Correlation Between BII Railway and HOCHSCHILD MINING
Can any of the company-specific risk be diversified away by investing in both BII Railway 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 BII Railway and HOCHSCHILD MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BII Railway Transportation and HOCHSCHILD MINING, you can compare the effects of market volatilities on BII Railway 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 BII Railway with a short position of HOCHSCHILD MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of BII Railway and HOCHSCHILD MINING.
Diversification Opportunities for BII Railway and HOCHSCHILD MINING
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BII and HOCHSCHILD is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding BII Railway Transportation and HOCHSCHILD MINING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HOCHSCHILD MINING and BII Railway 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 BII Railway Transportation 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 BII Railway i.e., BII Railway and HOCHSCHILD MINING go up and down completely randomly.
Pair Corralation between BII Railway and HOCHSCHILD MINING
Assuming the 90 days horizon BII Railway Transportation is expected to generate 0.5 times more return on investment than HOCHSCHILD MINING. However, BII Railway Transportation is 2.01 times less risky than HOCHSCHILD MINING. It trades about 0.27 of its potential returns per unit of risk. HOCHSCHILD MINING is currently generating about -0.06 per unit of risk. If you would invest 2.60 in BII Railway Transportation on October 11, 2024 and sell it today you would earn a total of 0.20 from holding BII Railway Transportation or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BII Railway Transportation vs. HOCHSCHILD MINING
Performance |
| Timeline |
| BII Railway Transpor |
| HOCHSCHILD MINING |
BII Railway and HOCHSCHILD MINING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BII Railway and HOCHSCHILD MINING
The main advantage of trading using opposite BII Railway and HOCHSCHILD MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BII Railway 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.| BII Railway vs. APPLIED MATERIALS | BII Railway vs. ecotel communication ag | BII Railway vs. MOBILE FACTORY INC | BII Railway vs. Compagnie Plastic Omnium |
| HOCHSCHILD MINING vs. PARKEN Sport Entertainment | HOCHSCHILD MINING vs. Ares Management Corp | HOCHSCHILD MINING vs. Fukuyama Transporting Co | HOCHSCHILD MINING vs. BII Railway Transportation |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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