Correlation Between Ferrexpo PLC and Hochschild Mining
Can any of the company-specific risk be diversified away by investing in both Ferrexpo 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 Ferrexpo 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 Ferrexpo PLC and Hochschild Mining plc, you can compare the effects of market volatilities on Ferrexpo 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 Ferrexpo PLC with a short position of Hochschild Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ferrexpo PLC and Hochschild Mining.
Diversification Opportunities for Ferrexpo PLC and Hochschild Mining
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ferrexpo and Hochschild is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Ferrexpo 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 Ferrexpo 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 Ferrexpo 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 Ferrexpo PLC i.e., Ferrexpo PLC and Hochschild Mining go up and down completely randomly.
Pair Corralation between Ferrexpo PLC and Hochschild Mining
Assuming the 90 days trading horizon Ferrexpo PLC is expected to generate 1.79 times more return on investment than Hochschild Mining. However, Ferrexpo PLC is 1.79 times more volatile than Hochschild Mining plc. It trades about 0.11 of its potential returns per unit of risk. Hochschild Mining plc is currently generating about 0.05 per unit of risk. If you would invest 4,450 in Ferrexpo PLC on August 28, 2024 and sell it today you would earn a total of 3,260 from holding Ferrexpo PLC or generate 73.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ferrexpo PLC vs. Hochschild Mining plc
Performance |
| Timeline |
| Ferrexpo PLC |
| Hochschild Mining plc |
Ferrexpo PLC and Hochschild Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ferrexpo PLC and Hochschild Mining
The main advantage of trading using opposite Ferrexpo PLC and Hochschild Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ferrexpo 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.| Ferrexpo PLC vs. Spirent Communications plc | Ferrexpo PLC vs. SBM Offshore NV | Ferrexpo PLC vs. Eastman Chemical Co | Ferrexpo PLC vs. Charter Communications Cl |
| Hochschild Mining vs. Greenroc Mining PLC | Hochschild Mining vs. Wheaton Precious Metals | Hochschild Mining vs. T Mobile | Hochschild Mining vs. Zoom Video Communications |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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