Correlation Between Hochschild Mining and SIERRA METALS
Can any of the company-specific risk be diversified away by investing in both Hochschild Mining and SIERRA METALS 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 SIERRA METALS 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 SIERRA METALS, you can compare the effects of market volatilities on Hochschild Mining and SIERRA METALS 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 SIERRA METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochschild Mining and SIERRA METALS.
Diversification Opportunities for Hochschild Mining and SIERRA METALS
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hochschild and SIERRA is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Hochschild Mining plc and SIERRA METALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIERRA METALS 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 SIERRA METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIERRA METALS has no effect on the direction of Hochschild Mining i.e., Hochschild Mining and SIERRA METALS go up and down completely randomly.
Pair Corralation between Hochschild Mining and SIERRA METALS
Assuming the 90 days horizon Hochschild Mining plc is expected to under-perform the SIERRA METALS. But the stock apears to be less risky and, when comparing its historical volatility, Hochschild Mining plc is 1.07 times less risky than SIERRA METALS. The stock trades about -0.03 of its potential returns per unit of risk. The SIERRA METALS is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 56.00 in SIERRA METALS on October 11, 2024 and sell it today you would lose (2.00) from holding SIERRA METALS or give up 3.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hochschild Mining plc vs. SIERRA METALS
Performance |
| Timeline |
| Hochschild Mining plc |
| SIERRA METALS |
Hochschild Mining and SIERRA METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochschild Mining and SIERRA METALS
The main advantage of trading using opposite Hochschild Mining and SIERRA METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochschild Mining position performs unexpectedly, SIERRA METALS 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 SIERRA METALS will offset losses from the drop in SIERRA METALS's long position.| Hochschild Mining vs. Ribbon Communications | Hochschild Mining vs. T MOBILE INCDL 00001 | Hochschild Mining vs. Commonwealth Bank of | Hochschild Mining vs. CVB Financial Corp |
| SIERRA METALS vs. Media and Games | SIERRA METALS vs. AAC TECHNOLOGHLDGADR | SIERRA METALS vs. OURGAME INTHOLDL 00005 | SIERRA METALS vs. Hochschild Mining plc |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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