Correlation Between Hochschild Mining and Deutsche Telekom
Can any of the company-specific risk be diversified away by investing in both Hochschild Mining and Deutsche Telekom 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 Deutsche Telekom 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 Deutsche Telekom AG, you can compare the effects of market volatilities on Hochschild Mining and Deutsche Telekom 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 Deutsche Telekom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochschild Mining and Deutsche Telekom.
Diversification Opportunities for Hochschild Mining and Deutsche Telekom
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hochschild and Deutsche is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Hochschild Mining plc and Deutsche Telekom AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Telekom 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 Deutsche Telekom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Telekom has no effect on the direction of Hochschild Mining i.e., Hochschild Mining and Deutsche Telekom go up and down completely randomly.
Pair Corralation between Hochschild Mining and Deutsche Telekom
Assuming the 90 days horizon Hochschild Mining plc is expected to generate 4.39 times more return on investment than Deutsche Telekom. However, Hochschild Mining is 4.39 times more volatile than Deutsche Telekom AG. It trades about 0.07 of its potential returns per unit of risk. Deutsche Telekom AG is currently generating about 0.3 per unit of risk. If you would invest 216.00 in Hochschild Mining plc on August 28, 2024 and sell it today you would earn a total of 57.00 from holding Hochschild Mining plc or generate 26.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.22% |
| Values | Daily Returns |
Hochschild Mining plc vs. Deutsche Telekom AG
Performance |
| Timeline |
| Hochschild Mining plc |
| Deutsche Telekom |
Hochschild Mining and Deutsche Telekom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochschild Mining and Deutsche Telekom
The main advantage of trading using opposite Hochschild Mining and Deutsche Telekom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochschild Mining position performs unexpectedly, Deutsche Telekom 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 Deutsche Telekom will offset losses from the drop in Deutsche Telekom's long position.| Hochschild Mining vs. Franco Nevada | Hochschild Mining vs. Agnico Eagle Mines | Hochschild Mining vs. Superior Plus Corp | Hochschild Mining vs. NMI Holdings |
| Deutsche Telekom vs. Hochschild Mining plc | Deutsche Telekom vs. EAST SIDE GAMES | Deutsche Telekom vs. TROPHY GAMES DEV | Deutsche Telekom vs. FUTURE GAMING GRP |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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