Correlation Between Cerrado Gold and Hochschild Mining
Can any of the company-specific risk be diversified away by investing in both Cerrado Gold 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 Cerrado Gold and Hochschild Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cerrado Gold and Hochschild Mining PLC, you can compare the effects of market volatilities on Cerrado Gold 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 Cerrado Gold with a short position of Hochschild Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cerrado Gold and Hochschild Mining.
Diversification Opportunities for Cerrado Gold and Hochschild Mining
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cerrado and Hochschild is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Cerrado Gold 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 Cerrado Gold 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 Cerrado Gold 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 Cerrado Gold i.e., Cerrado Gold and Hochschild Mining go up and down completely randomly.
Pair Corralation between Cerrado Gold and Hochschild Mining
Assuming the 90 days horizon Cerrado Gold is expected to generate 1.15 times less return on investment than Hochschild Mining. In addition to that, Cerrado Gold is 2.72 times more volatile than Hochschild Mining PLC. It trades about 0.03 of its total potential returns per unit of risk. Hochschild Mining PLC is currently generating about 0.09 per unit of volatility. If you would invest 133.00 in Hochschild Mining PLC on September 14, 2024 and sell it today you would earn a total of 152.00 from holding Hochschild Mining PLC or generate 114.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.26% |
| Values | Daily Returns |
Cerrado Gold vs. Hochschild Mining PLC
Performance |
| Timeline |
| Cerrado Gold |
| Hochschild Mining PLC |
Cerrado Gold and Hochschild Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cerrado Gold and Hochschild Mining
The main advantage of trading using opposite Cerrado Gold and Hochschild Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cerrado Gold 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.| Cerrado Gold vs. Revival Gold | Cerrado Gold vs. Galiano Gold | Cerrado Gold vs. US Gold Corp | Cerrado Gold vs. HUMANA INC |
| Hochschild Mining vs. Radisson Mining Resources | Hochschild Mining vs. Big Ridge Gold | Hochschild Mining vs. Cerrado Gold | Hochschild Mining vs. Orogen Royalties |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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