Correlation Between HOCHSCHILD MINING and ARISTOCRAT LEISURE
Can any of the company-specific risk be diversified away by investing in both HOCHSCHILD MINING and ARISTOCRAT LEISURE 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 HOCHSCHILD MINING and ARISTOCRAT LEISURE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HOCHSCHILD MINING and ARISTOCRAT LEISURE, you can compare the effects of market volatilities on HOCHSCHILD MINING and ARISTOCRAT LEISURE 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 HOCHSCHILD MINING with a short position of ARISTOCRAT LEISURE. Check out your portfolio center. Please also check ongoing floating volatility patterns of HOCHSCHILD MINING and ARISTOCRAT LEISURE.
Diversification Opportunities for HOCHSCHILD MINING and ARISTOCRAT LEISURE
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HOCHSCHILD and ARISTOCRAT is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding HOCHSCHILD MINING and ARISTOCRAT LEISURE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARISTOCRAT LEISURE and HOCHSCHILD 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 HOCHSCHILD MINING are associated (or correlated) with ARISTOCRAT LEISURE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARISTOCRAT LEISURE has no effect on the direction of HOCHSCHILD MINING i.e., HOCHSCHILD MINING and ARISTOCRAT LEISURE go up and down completely randomly.
Pair Corralation between HOCHSCHILD MINING and ARISTOCRAT LEISURE
Assuming the 90 days trading horizon HOCHSCHILD MINING is expected to generate 3.09 times more return on investment than ARISTOCRAT LEISURE. However, HOCHSCHILD MINING is 3.09 times more volatile than ARISTOCRAT LEISURE. It trades about 0.08 of its potential returns per unit of risk. ARISTOCRAT LEISURE is currently generating about 0.14 per unit of risk. If you would invest 71.00 in HOCHSCHILD MINING on November 27, 2024 and sell it today you would earn a total of 158.00 from holding HOCHSCHILD MINING or generate 222.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HOCHSCHILD MINING vs. ARISTOCRAT LEISURE
Performance |
| Timeline |
| HOCHSCHILD MINING |
| ARISTOCRAT LEISURE |
HOCHSCHILD MINING and ARISTOCRAT LEISURE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HOCHSCHILD MINING and ARISTOCRAT LEISURE
The main advantage of trading using opposite HOCHSCHILD MINING and ARISTOCRAT LEISURE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HOCHSCHILD MINING position performs unexpectedly, ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE will offset losses from the drop in ARISTOCRAT LEISURE's long position.| HOCHSCHILD MINING vs. Playa Hotels Resorts | HOCHSCHILD MINING vs. Verizon Communications | HOCHSCHILD MINING vs. ARISTOCRAT LEISURE | HOCHSCHILD MINING vs. SmarTone Telecommunications Holdings |
| ARISTOCRAT LEISURE vs. Apple Inc | ARISTOCRAT LEISURE vs. Apple Inc | ARISTOCRAT LEISURE vs. Apple Inc | ARISTOCRAT LEISURE vs. Apple Inc |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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