Correlation Between HOCHSCHILD MINING and SVENSKA CELLULO
Can any of the company-specific risk be diversified away by investing in both HOCHSCHILD MINING and SVENSKA CELLULO 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 SVENSKA CELLULO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HOCHSCHILD MINING and SVENSKA CELLULO B , you can compare the effects of market volatilities on HOCHSCHILD MINING and SVENSKA CELLULO 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 SVENSKA CELLULO. Check out your portfolio center. Please also check ongoing floating volatility patterns of HOCHSCHILD MINING and SVENSKA CELLULO.
Diversification Opportunities for HOCHSCHILD MINING and SVENSKA CELLULO
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HOCHSCHILD and SVENSKA is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding HOCHSCHILD MINING and SVENSKA CELLULO B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SVENSKA CELLULO B 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 SVENSKA CELLULO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SVENSKA CELLULO B has no effect on the direction of HOCHSCHILD MINING i.e., HOCHSCHILD MINING and SVENSKA CELLULO go up and down completely randomly.
Pair Corralation between HOCHSCHILD MINING and SVENSKA CELLULO
Assuming the 90 days trading horizon HOCHSCHILD MINING is expected to generate 2.85 times more return on investment than SVENSKA CELLULO. However, HOCHSCHILD MINING is 2.85 times more volatile than SVENSKA CELLULO B . It trades about 0.07 of its potential returns per unit of risk. SVENSKA CELLULO B is currently generating about 0.08 per unit of risk. If you would invest 215.00 in HOCHSCHILD MINING on November 28, 2024 and sell it today you would earn a total of 9.00 from holding HOCHSCHILD MINING or generate 4.19% 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. SVENSKA CELLULO B
Performance |
| Timeline |
| HOCHSCHILD MINING |
| SVENSKA CELLULO B |
HOCHSCHILD MINING and SVENSKA CELLULO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HOCHSCHILD MINING and SVENSKA CELLULO
The main advantage of trading using opposite HOCHSCHILD MINING and SVENSKA CELLULO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HOCHSCHILD MINING position performs unexpectedly, SVENSKA CELLULO 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 SVENSKA CELLULO will offset losses from the drop in SVENSKA CELLULO's long position.| HOCHSCHILD MINING vs. Southwest Airlines Co | HOCHSCHILD MINING vs. Corporate Office Properties | HOCHSCHILD MINING vs. 24SEVENOFFICE GROUP AB | HOCHSCHILD MINING vs. Office Properties Income |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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