Correlation Between HOCHSCHILD MINING and BP Plc
Can any of the company-specific risk be diversified away by investing in both HOCHSCHILD MINING and BP Plc 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 BP Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HOCHSCHILD MINING and BP plc, you can compare the effects of market volatilities on HOCHSCHILD MINING and BP Plc 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 BP Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of HOCHSCHILD MINING and BP Plc.
Diversification Opportunities for HOCHSCHILD MINING and BP Plc
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HOCHSCHILD and BSU is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding HOCHSCHILD MINING and BP plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BP plc 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 BP Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BP plc has no effect on the direction of HOCHSCHILD MINING i.e., HOCHSCHILD MINING and BP Plc go up and down completely randomly.
Pair Corralation between HOCHSCHILD MINING and BP Plc
Assuming the 90 days trading horizon HOCHSCHILD MINING is expected to under-perform the BP Plc. In addition to that, HOCHSCHILD MINING is 1.97 times more volatile than BP plc. It trades about -0.03 of its total potential returns per unit of risk. BP plc is currently generating about 0.14 per unit of volatility. If you would invest 2,614 in BP plc on September 1, 2024 and sell it today you would earn a total of 126.00 from holding BP plc or generate 4.82% 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. BP plc
Performance |
| Timeline |
| HOCHSCHILD MINING |
| BP plc |
HOCHSCHILD MINING and BP Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HOCHSCHILD MINING and BP Plc
The main advantage of trading using opposite HOCHSCHILD MINING and BP Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HOCHSCHILD MINING position performs unexpectedly, BP Plc 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 BP Plc will offset losses from the drop in BP Plc's long position.| HOCHSCHILD MINING vs. Gruppo Mutuionline SpA | HOCHSCHILD MINING vs. STRAYER EDUCATION | HOCHSCHILD MINING vs. American Public Education | HOCHSCHILD MINING vs. CHINA EDUCATION GROUP |
| BP Plc vs. Siamgas And Petrochemicals | BP Plc vs. Granite Construction | BP Plc vs. Performance Food Group | BP Plc vs. NIPPON MEAT PACKERS |
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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