Correlation Between HOCHSCHILD MINING and PEPKOR
Can any of the company-specific risk be diversified away by investing in both HOCHSCHILD MINING and PEPKOR 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 PEPKOR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HOCHSCHILD MINING and PEPKOR LTD, you can compare the effects of market volatilities on HOCHSCHILD MINING and PEPKOR 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 PEPKOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of HOCHSCHILD MINING and PEPKOR.
Diversification Opportunities for HOCHSCHILD MINING and PEPKOR
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between HOCHSCHILD and PEPKOR is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding HOCHSCHILD MINING and PEPKOR LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PEPKOR LTD 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 PEPKOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PEPKOR LTD has no effect on the direction of HOCHSCHILD MINING i.e., HOCHSCHILD MINING and PEPKOR go up and down completely randomly.
Pair Corralation between HOCHSCHILD MINING and PEPKOR
Assuming the 90 days trading horizon HOCHSCHILD MINING is expected to under-perform the PEPKOR. In addition to that, HOCHSCHILD MINING is 1.35 times more volatile than PEPKOR LTD. It trades about -0.03 of its total potential returns per unit of risk. PEPKOR LTD is currently generating about 0.45 per unit of volatility. If you would invest 114.00 in PEPKOR LTD on September 5, 2024 and sell it today you would earn a total of 30.00 from holding PEPKOR LTD or generate 26.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
HOCHSCHILD MINING vs. PEPKOR LTD
Performance |
| Timeline |
| HOCHSCHILD MINING |
| PEPKOR LTD |
HOCHSCHILD MINING and PEPKOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HOCHSCHILD MINING and PEPKOR
The main advantage of trading using opposite HOCHSCHILD MINING and PEPKOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HOCHSCHILD MINING position performs unexpectedly, PEPKOR 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 PEPKOR will offset losses from the drop in PEPKOR's long position.| HOCHSCHILD MINING vs. TOTAL GABON | HOCHSCHILD MINING vs. Walgreens Boots Alliance | HOCHSCHILD MINING vs. Peak Resources Limited |
| PEPKOR vs. PT Indofood Sukses | PEPKOR vs. NTG Nordic Transport | PEPKOR vs. Dairy Farm International | PEPKOR vs. BII Railway Transportation |
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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