Correlation Between Hochschild Mining and Penta-Ocean Construction
Can any of the company-specific risk be diversified away by investing in both Hochschild Mining and Penta-Ocean Construction 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 Penta-Ocean Construction 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 Penta Ocean Construction Co, you can compare the effects of market volatilities on Hochschild Mining and Penta-Ocean Construction 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 Penta-Ocean Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochschild Mining and Penta-Ocean Construction.
Diversification Opportunities for Hochschild Mining and Penta-Ocean Construction
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hochschild and Penta-Ocean is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Hochschild Mining plc and Penta Ocean Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penta-Ocean Construction 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 Penta-Ocean Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penta-Ocean Construction has no effect on the direction of Hochschild Mining i.e., Hochschild Mining and Penta-Ocean Construction go up and down completely randomly.
Pair Corralation between Hochschild Mining and Penta-Ocean Construction
Assuming the 90 days horizon Hochschild Mining plc is expected to generate 2.22 times more return on investment than Penta-Ocean Construction. However, Hochschild Mining is 2.22 times more volatile than Penta Ocean Construction Co. It trades about 0.08 of its potential returns per unit of risk. Penta Ocean Construction Co is currently generating about 0.0 per unit of risk. If you would invest 90.00 in Hochschild Mining plc on October 13, 2024 and sell it today you would earn a total of 188.00 from holding Hochschild Mining plc or generate 208.89% 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. Penta Ocean Construction Co
Performance |
| Timeline |
| Hochschild Mining plc |
| Penta-Ocean Construction |
Hochschild Mining and Penta-Ocean Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochschild Mining and Penta-Ocean Construction
The main advantage of trading using opposite Hochschild Mining and Penta-Ocean Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochschild Mining position performs unexpectedly, Penta-Ocean Construction 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 Penta-Ocean Construction will offset losses from the drop in Penta-Ocean Construction's long position.| Hochschild Mining vs. HK Electric Investments | Hochschild Mining vs. Firan Technology Group | Hochschild Mining vs. Guangdong Investment Limited | Hochschild Mining vs. ECHO INVESTMENT ZY |
| Penta-Ocean Construction vs. Hochschild Mining plc | Penta-Ocean Construction vs. JLF INVESTMENT | Penta-Ocean Construction vs. Penn National Gaming | Penta-Ocean Construction vs. GAMING FAC SA |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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