Correlation Between Hochschild Mining and Burlington Stores
Can any of the company-specific risk be diversified away by investing in both Hochschild Mining and Burlington Stores 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 Burlington Stores 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 Burlington Stores, you can compare the effects of market volatilities on Hochschild Mining and Burlington Stores 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 Burlington Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochschild Mining and Burlington Stores.
Diversification Opportunities for Hochschild Mining and Burlington Stores
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hochschild and Burlington is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Hochschild Mining plc and Burlington Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burlington Stores 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 Burlington Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burlington Stores has no effect on the direction of Hochschild Mining i.e., Hochschild Mining and Burlington Stores go up and down completely randomly.
Pair Corralation between Hochschild Mining and Burlington Stores
Assuming the 90 days horizon Hochschild Mining plc is expected to generate 1.53 times more return on investment than Burlington Stores. However, Hochschild Mining is 1.53 times more volatile than Burlington Stores. It trades about 0.16 of its potential returns per unit of risk. Burlington Stores is currently generating about 0.09 per unit of risk. If you would invest 109.00 in Hochschild Mining plc on August 27, 2024 and sell it today you would earn a total of 164.00 from holding Hochschild Mining plc or generate 150.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hochschild Mining plc vs. Burlington Stores
Performance |
| Timeline |
| Hochschild Mining plc |
| Burlington Stores |
Hochschild Mining and Burlington Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochschild Mining and Burlington Stores
The main advantage of trading using opposite Hochschild Mining and Burlington Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochschild Mining position performs unexpectedly, Burlington Stores 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 Burlington Stores will offset losses from the drop in Burlington Stores' long position.| Hochschild Mining vs. Franco Nevada | Hochschild Mining vs. Agnico Eagle Mines | Hochschild Mining vs. Superior Plus Corp | Hochschild Mining vs. NMI Holdings |
| Burlington Stores vs. GALENA MINING LTD | Burlington Stores vs. MINCO SILVER | Burlington Stores vs. Computershare Limited | Burlington Stores vs. GRIFFIN MINING LTD |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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