Correlation Between DCC Plc and Hochschild Mining
Can any of the company-specific risk be diversified away by investing in both DCC Plc 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 DCC Plc and Hochschild Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DCC plc and Hochschild Mining plc, you can compare the effects of market volatilities on DCC Plc 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 DCC Plc with a short position of Hochschild Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of DCC Plc and Hochschild Mining.
Diversification Opportunities for DCC Plc and Hochschild Mining
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DCC and Hochschild is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding DCC 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 DCC Plc 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 DCC 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 DCC Plc i.e., DCC Plc and Hochschild Mining go up and down completely randomly.
Pair Corralation between DCC Plc and Hochschild Mining
Assuming the 90 days trading horizon DCC plc is expected to generate 0.27 times more return on investment than Hochschild Mining. However, DCC plc is 3.75 times less risky than Hochschild Mining. It trades about 0.3 of its potential returns per unit of risk. Hochschild Mining plc is currently generating about -0.09 per unit of risk. If you would invest 515,500 in DCC plc on October 25, 2024 and sell it today you would earn a total of 34,000 from holding DCC plc or generate 6.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DCC plc vs. Hochschild Mining plc
Performance |
| Timeline |
| DCC plc |
| Hochschild Mining plc |
DCC Plc and Hochschild Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DCC Plc and Hochschild Mining
The main advantage of trading using opposite DCC Plc and Hochschild Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DCC Plc 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.| DCC Plc vs. Tavistock Investments Plc | DCC Plc vs. Invesco Physical Silver | DCC Plc vs. Darden Restaurants | DCC Plc vs. Aberdeen Diversified Income |
| Hochschild Mining vs. Givaudan SA | Hochschild Mining vs. Antofagasta PLC | Hochschild Mining vs. Ferrexpo 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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