Correlation Between GEELY AUTOMOBILE and Hochschild Mining
Can any of the company-specific risk be diversified away by investing in both GEELY AUTOMOBILE 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 GEELY AUTOMOBILE and Hochschild Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GEELY AUTOMOBILE and Hochschild Mining plc, you can compare the effects of market volatilities on GEELY AUTOMOBILE 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 GEELY AUTOMOBILE with a short position of Hochschild Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEELY AUTOMOBILE and Hochschild Mining.
Diversification Opportunities for GEELY AUTOMOBILE and Hochschild Mining
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GEELY and Hochschild is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding GEELY AUTOMOBILE 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 GEELY AUTOMOBILE 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 GEELY AUTOMOBILE 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 GEELY AUTOMOBILE i.e., GEELY AUTOMOBILE and Hochschild Mining go up and down completely randomly.
Pair Corralation between GEELY AUTOMOBILE and Hochschild Mining
Assuming the 90 days trading horizon GEELY AUTOMOBILE is expected to generate 0.92 times more return on investment than Hochschild Mining. However, GEELY AUTOMOBILE is 1.08 times less risky than Hochschild Mining. It trades about -0.01 of its potential returns per unit of risk. Hochschild Mining plc is currently generating about -0.06 per unit of risk. If you would invest 170.00 in GEELY AUTOMOBILE on August 31, 2024 and sell it today you would lose (3.00) from holding GEELY AUTOMOBILE or give up 1.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GEELY AUTOMOBILE vs. Hochschild Mining plc
Performance |
| Timeline |
| GEELY AUTOMOBILE |
| Hochschild Mining plc |
GEELY AUTOMOBILE and Hochschild Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GEELY AUTOMOBILE and Hochschild Mining
The main advantage of trading using opposite GEELY AUTOMOBILE and Hochschild Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEELY AUTOMOBILE 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.| GEELY AUTOMOBILE vs. SIVERS SEMICONDUCTORS AB | GEELY AUTOMOBILE vs. Darden Restaurants | GEELY AUTOMOBILE vs. Reliance Steel Aluminum | GEELY AUTOMOBILE vs. Q2M Managementberatung AG |
| Hochschild Mining vs. Carsales | Hochschild Mining vs. GEELY AUTOMOBILE | Hochschild Mining vs. The Hanover Insurance | Hochschild Mining vs. OFFICE DEPOT |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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