Correlation Between Compass Group and Hochschild Mining
Can any of the company-specific risk be diversified away by investing in both Compass Group 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 Compass Group and Hochschild Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compass Group PLC and Hochschild Mining plc, you can compare the effects of market volatilities on Compass Group 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 Compass Group with a short position of Hochschild Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compass Group and Hochschild Mining.
Diversification Opportunities for Compass Group and Hochschild Mining
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Compass and Hochschild is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Compass Group PLC 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 Compass Group 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 Compass Group PLC 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 Compass Group i.e., Compass Group and Hochschild Mining go up and down completely randomly.
Pair Corralation between Compass Group and Hochschild Mining
Assuming the 90 days trading horizon Compass Group PLC is expected to generate 0.25 times more return on investment than Hochschild Mining. However, Compass Group PLC is 4.07 times less risky than Hochschild Mining. It trades about 0.19 of its potential returns per unit of risk. Hochschild Mining plc is currently generating about -0.2 per unit of risk. If you would invest 264,671 in Compass Group PLC on November 2, 2024 and sell it today you would earn a total of 11,529 from holding Compass Group PLC or generate 4.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compass Group PLC vs. Hochschild Mining plc
Performance |
| Timeline |
| Compass Group PLC |
| Hochschild Mining plc |
Compass Group and Hochschild Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compass Group and Hochschild Mining
The main advantage of trading using opposite Compass Group and Hochschild Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compass Group 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.| Compass Group vs. Public Storage | Compass Group vs. Supermarket Income REIT | Compass Group vs. MoneysupermarketCom Group PLC | Compass Group vs. Premier Foods PLC |
| Hochschild Mining vs. Polar Capital Technology | Hochschild Mining vs. Sabien Technology Group | Hochschild Mining vs. Zegona Communications Plc | Hochschild Mining vs. Check Point Software |
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.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |