Correlation Between Hochschild Mining and GEO
Can any of the company-specific risk be diversified away by investing in both Hochschild Mining and GEO 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 GEO 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 The GEO Group, you can compare the effects of market volatilities on Hochschild Mining and GEO 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 GEO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochschild Mining and GEO.
Diversification Opportunities for Hochschild Mining and GEO
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hochschild and GEO is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Hochschild Mining plc and The GEO Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEO Group 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 GEO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEO Group has no effect on the direction of Hochschild Mining i.e., Hochschild Mining and GEO go up and down completely randomly.
Pair Corralation between Hochschild Mining and GEO
Assuming the 90 days horizon Hochschild Mining plc is expected to under-perform the GEO. But the stock apears to be less risky and, when comparing its historical volatility, Hochschild Mining plc is 3.17 times less risky than GEO. The stock trades about -0.03 of its potential returns per unit of risk. The The GEO Group is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 1,388 in The GEO Group on September 1, 2024 and sell it today you would earn a total of 1,268 from holding The GEO Group or generate 91.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hochschild Mining plc vs. The GEO Group
Performance |
| Timeline |
| Hochschild Mining plc |
| GEO Group |
Hochschild Mining and GEO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochschild Mining and GEO
The main advantage of trading using opposite Hochschild Mining and GEO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochschild Mining position performs unexpectedly, GEO 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 GEO will offset losses from the drop in GEO'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 |
| GEO vs. Hochschild Mining plc | GEO vs. FRACTAL GAMING GROUP | GEO vs. Scientific Games | GEO vs. VULCAN MATERIALS |
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 Stocks Directory module to find actively traded stocks across global markets.
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