Correlation Between Hochschild Mining and Airbus SE
Can any of the company-specific risk be diversified away by investing in both Hochschild Mining and Airbus SE 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 Airbus SE 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 Airbus SE, you can compare the effects of market volatilities on Hochschild Mining and Airbus SE 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 Airbus SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochschild Mining and Airbus SE.
Diversification Opportunities for Hochschild Mining and Airbus SE
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hochschild and Airbus is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Hochschild Mining plc and Airbus SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airbus SE 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 Airbus SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airbus SE has no effect on the direction of Hochschild Mining i.e., Hochschild Mining and Airbus SE go up and down completely randomly.
Pair Corralation between Hochschild Mining and Airbus SE
Assuming the 90 days horizon Hochschild Mining plc is expected to generate 2.25 times more return on investment than Airbus SE. However, Hochschild Mining is 2.25 times more volatile than Airbus SE. It trades about 0.12 of its potential returns per unit of risk. Airbus SE is currently generating about 0.03 per unit of risk. If you would invest 107.00 in Hochschild Mining plc on September 4, 2024 and sell it today you would earn a total of 149.00 from holding Hochschild Mining plc or generate 139.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Hochschild Mining plc vs. Airbus SE
Performance |
| Timeline |
| Hochschild Mining plc |
| Airbus SE |
Hochschild Mining and Airbus SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochschild Mining and Airbus SE
The main advantage of trading using opposite Hochschild Mining and Airbus SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochschild Mining position performs unexpectedly, Airbus SE 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 Airbus SE will offset losses from the drop in Airbus SE's long position.| Hochschild Mining vs. ZIJIN MINH UNSPADR20 | Hochschild Mining vs. Barrick Gold | Hochschild Mining vs. Superior Plus Corp | Hochschild Mining vs. NMI Holdings |
| Airbus SE vs. Lion One Metals | Airbus SE vs. Fidelity National Information | Airbus SE vs. Perseus Mining Limited | Airbus SE vs. Hyrican Informationssysteme Aktiengesellschaft |
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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