Correlation Between GEO and Hochschild Mining
Can any of the company-specific risk be diversified away by investing in both GEO 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 GEO and Hochschild Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The GEO Group and Hochschild Mining plc, you can compare the effects of market volatilities on GEO 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 GEO with a short position of Hochschild Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEO and Hochschild Mining.
Diversification Opportunities for GEO and Hochschild Mining
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GEO and Hochschild is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding The GEO Group 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 GEO 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 The GEO Group 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 GEO i.e., GEO and Hochschild Mining go up and down completely randomly.
Pair Corralation between GEO and Hochschild Mining
Assuming the 90 days horizon The GEO Group is expected to generate 3.16 times more return on investment than Hochschild Mining. However, GEO is 3.16 times more volatile than Hochschild Mining plc. It trades about 0.38 of its potential returns per unit of risk. Hochschild Mining plc is currently generating about -0.07 per unit of risk. If you would invest 1,303 in The GEO Group on September 3, 2024 and sell it today you would earn a total of 1,353 from holding The GEO Group or generate 103.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The GEO Group vs. Hochschild Mining plc
Performance |
| Timeline |
| GEO Group |
| Hochschild Mining plc |
GEO and Hochschild Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GEO and Hochschild Mining
The main advantage of trading using opposite GEO and Hochschild Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEO 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.| GEO vs. COSMOSTEEL HLDGS | GEO vs. CECO ENVIRONMENTAL | GEO vs. TAL Education Group | GEO vs. Perma Fix Environmental Services |
| Hochschild Mining vs. ZIJIN MINH UNSPADR20 | Hochschild Mining vs. Barrick Gold | Hochschild Mining vs. Superior Plus Corp | Hochschild Mining vs. NMI Holdings |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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