Correlation Between Hochschild Mining and CARETRUST REIT
Can any of the company-specific risk be diversified away by investing in both Hochschild Mining and CARETRUST REIT 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 CARETRUST REIT 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 CARETRUST REIT DL 01, you can compare the effects of market volatilities on Hochschild Mining and CARETRUST REIT 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 CARETRUST REIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochschild Mining and CARETRUST REIT.
Diversification Opportunities for Hochschild Mining and CARETRUST REIT
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hochschild and CARETRUST is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Hochschild Mining plc and CARETRUST REIT DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARETRUST REIT DL 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 CARETRUST REIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CARETRUST REIT DL has no effect on the direction of Hochschild Mining i.e., Hochschild Mining and CARETRUST REIT go up and down completely randomly.
Pair Corralation between Hochschild Mining and CARETRUST REIT
Assuming the 90 days horizon Hochschild Mining plc is expected to generate 1.91 times more return on investment than CARETRUST REIT. However, Hochschild Mining is 1.91 times more volatile than CARETRUST REIT DL 01. It trades about -0.04 of its potential returns per unit of risk. CARETRUST REIT DL 01 is currently generating about -0.12 per unit of risk. If you would invest 266.00 in Hochschild Mining plc on September 2, 2024 and sell it today you would lose (10.00) from holding Hochschild Mining plc or give up 3.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hochschild Mining plc vs. CARETRUST REIT DL 01
Performance |
| Timeline |
| Hochschild Mining plc |
| CARETRUST REIT DL |
Hochschild Mining and CARETRUST REIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochschild Mining and CARETRUST REIT
The main advantage of trading using opposite Hochschild Mining and CARETRUST REIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochschild Mining position performs unexpectedly, CARETRUST REIT 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 CARETRUST REIT will offset losses from the drop in CARETRUST REIT's long position.| Hochschild Mining vs. ZIJIN MINH UNSPADR20 | Hochschild Mining vs. Superior Plus Corp | Hochschild Mining vs. NMI Holdings | Hochschild Mining vs. Origin Agritech |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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