Correlation Between Globex Mining and HOCHSCHILD MINING
Can any of the company-specific risk be diversified away by investing in both Globex Mining 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 Globex Mining and HOCHSCHILD MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globex Mining Enterprises and HOCHSCHILD MINING, you can compare the effects of market volatilities on Globex Mining 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 Globex Mining with a short position of HOCHSCHILD MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globex Mining and HOCHSCHILD MINING.
Diversification Opportunities for Globex Mining and HOCHSCHILD MINING
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Globex and HOCHSCHILD is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Globex Mining Enterprises and HOCHSCHILD MINING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HOCHSCHILD MINING and Globex Mining 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 Globex Mining Enterprises 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 Globex Mining i.e., Globex Mining and HOCHSCHILD MINING go up and down completely randomly.
Pair Corralation between Globex Mining and HOCHSCHILD MINING
Assuming the 90 days trading horizon Globex Mining is expected to generate 3.0 times less return on investment than HOCHSCHILD MINING. But when comparing it to its historical volatility, Globex Mining Enterprises is 1.77 times less risky than HOCHSCHILD MINING. It trades about 0.05 of its potential returns per unit of risk. HOCHSCHILD MINING is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 92.00 in HOCHSCHILD MINING on October 18, 2024 and sell it today you would earn a total of 167.00 from holding HOCHSCHILD MINING or generate 181.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globex Mining Enterprises vs. HOCHSCHILD MINING
Performance |
| Timeline |
| Globex Mining Enterprises |
| HOCHSCHILD MINING |
Globex Mining and HOCHSCHILD MINING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globex Mining and HOCHSCHILD MINING
The main advantage of trading using opposite Globex Mining and HOCHSCHILD MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globex Mining 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.| Globex Mining vs. Apple Inc | Globex Mining vs. Apple Inc | Globex Mining vs. Apple Inc | Globex Mining vs. Apple Inc |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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