Correlation Between Hochschild Mining and United Insurance
Can any of the company-specific risk be diversified away by investing in both Hochschild Mining and United Insurance 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 United Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hochschild Mining plc and United Insurance Holdings, you can compare the effects of market volatilities on Hochschild Mining and United Insurance 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 United Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochschild Mining and United Insurance.
Diversification Opportunities for Hochschild Mining and United Insurance
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hochschild and United is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Hochschild Mining plc and United Insurance Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Insurance Holdings 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 plc are associated (or correlated) with United Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Insurance Holdings has no effect on the direction of Hochschild Mining i.e., Hochschild Mining and United Insurance go up and down completely randomly.
Pair Corralation between Hochschild Mining and United Insurance
Assuming the 90 days horizon Hochschild Mining plc is expected to generate 0.88 times more return on investment than United Insurance. However, Hochschild Mining plc is 1.14 times less risky than United Insurance. It trades about 0.11 of its potential returns per unit of risk. United Insurance Holdings is currently generating about 0.07 per unit of risk. If you would invest 90.00 in Hochschild Mining plc on September 26, 2024 and sell it today you would earn a total of 166.00 from holding Hochschild Mining plc or generate 184.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hochschild Mining plc vs. United Insurance Holdings
Performance |
| Timeline |
| Hochschild Mining plc |
| United Insurance Holdings |
Hochschild Mining and United Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochschild Mining and United Insurance
The main advantage of trading using opposite Hochschild Mining and United Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochschild Mining position performs unexpectedly, United Insurance 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 United Insurance will offset losses from the drop in United Insurance's long position.| Hochschild Mining vs. ZIJIN MINH UNSPADR20 | Hochschild Mining vs. Newmont | Hochschild Mining vs. Barrick Gold | Hochschild Mining vs. Franco Nevada |
| United Insurance vs. Hochschild Mining plc | United Insurance vs. GameStop Corp | United Insurance vs. EAST SIDE GAMES | United Insurance vs. PLAYMATES TOYS |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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