Correlation Between HOCHSCHILD MINING and Swire Properties
Can any of the company-specific risk be diversified away by investing in both HOCHSCHILD MINING and Swire Properties 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 Swire Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HOCHSCHILD MINING and Swire Properties Limited, you can compare the effects of market volatilities on HOCHSCHILD MINING and Swire Properties 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 Swire Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of HOCHSCHILD MINING and Swire Properties.
Diversification Opportunities for HOCHSCHILD MINING and Swire Properties
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HOCHSCHILD and Swire is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding HOCHSCHILD MINING and Swire Properties Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swire Properties 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 Swire Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swire Properties has no effect on the direction of HOCHSCHILD MINING i.e., HOCHSCHILD MINING and Swire Properties go up and down completely randomly.
Pair Corralation between HOCHSCHILD MINING and Swire Properties
Assuming the 90 days trading horizon HOCHSCHILD MINING is expected to under-perform the Swire Properties. In addition to that, HOCHSCHILD MINING is 2.22 times more volatile than Swire Properties Limited. It trades about -0.14 of its total potential returns per unit of risk. Swire Properties Limited is currently generating about 0.02 per unit of volatility. If you would invest 182.00 in Swire Properties Limited on August 31, 2024 and sell it today you would earn a total of 1.00 from holding Swire Properties Limited or generate 0.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HOCHSCHILD MINING vs. Swire Properties Limited
Performance |
| Timeline |
| HOCHSCHILD MINING |
| Swire Properties |
HOCHSCHILD MINING and Swire Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HOCHSCHILD MINING and Swire Properties
The main advantage of trading using opposite HOCHSCHILD MINING and Swire Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HOCHSCHILD MINING position performs unexpectedly, Swire Properties 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 Swire Properties will offset losses from the drop in Swire Properties' long position.| HOCHSCHILD MINING vs. Xenia Hotels Resorts | HOCHSCHILD MINING vs. INFORMATION SVC GRP | HOCHSCHILD MINING vs. Cass Information Systems | HOCHSCHILD MINING vs. Fidelity National Information |
| Swire Properties vs. HOCHSCHILD MINING | Swire Properties vs. Penn National Gaming | Swire Properties vs. ARROW ELECTRONICS | Swire Properties vs. UMC Electronics Co |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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