Correlation Between HOCHSCHILD MINING and Evonik Industries
Can any of the company-specific risk be diversified away by investing in both HOCHSCHILD MINING and Evonik Industries 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 Evonik Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HOCHSCHILD MINING and Evonik Industries AG, you can compare the effects of market volatilities on HOCHSCHILD MINING and Evonik Industries 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 Evonik Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of HOCHSCHILD MINING and Evonik Industries.
Diversification Opportunities for HOCHSCHILD MINING and Evonik Industries
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HOCHSCHILD and Evonik is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding HOCHSCHILD MINING and Evonik Industries AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evonik Industries 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 Evonik Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evonik Industries has no effect on the direction of HOCHSCHILD MINING i.e., HOCHSCHILD MINING and Evonik Industries go up and down completely randomly.
Pair Corralation between HOCHSCHILD MINING and Evonik Industries
Assuming the 90 days trading horizon HOCHSCHILD MINING is expected to generate 2.5 times more return on investment than Evonik Industries. However, HOCHSCHILD MINING is 2.5 times more volatile than Evonik Industries AG. It trades about 0.15 of its potential returns per unit of risk. Evonik Industries AG is currently generating about -0.13 per unit of risk. If you would invest 219.00 in HOCHSCHILD MINING on September 14, 2024 and sell it today you would earn a total of 72.00 from holding HOCHSCHILD MINING or generate 32.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
HOCHSCHILD MINING vs. Evonik Industries AG
Performance |
| Timeline |
| HOCHSCHILD MINING |
| Evonik Industries |
HOCHSCHILD MINING and Evonik Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HOCHSCHILD MINING and Evonik Industries
The main advantage of trading using opposite HOCHSCHILD MINING and Evonik Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HOCHSCHILD MINING position performs unexpectedly, Evonik Industries 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 Evonik Industries will offset losses from the drop in Evonik Industries' long position.| HOCHSCHILD MINING vs. Apple Inc | HOCHSCHILD MINING vs. Apple Inc | HOCHSCHILD MINING vs. Apple Inc | HOCHSCHILD MINING vs. Apple Inc |
| Evonik Industries vs. BJs Restaurants | Evonik Industries vs. HOCHSCHILD MINING | Evonik Industries vs. QINGCI GAMES INC | Evonik Industries vs. International Game Technology |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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