Correlation Between Hochschild Mining and Westinghouse Air
Can any of the company-specific risk be diversified away by investing in both Hochschild Mining and Westinghouse Air 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 Westinghouse Air 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 Westinghouse Air Brake, you can compare the effects of market volatilities on Hochschild Mining and Westinghouse Air 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 Westinghouse Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochschild Mining and Westinghouse Air.
Diversification Opportunities for Hochschild Mining and Westinghouse Air
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hochschild and Westinghouse is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Hochschild Mining plc and Westinghouse Air Brake in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westinghouse Air Brake 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 Westinghouse Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westinghouse Air Brake has no effect on the direction of Hochschild Mining i.e., Hochschild Mining and Westinghouse Air go up and down completely randomly.
Pair Corralation between Hochschild Mining and Westinghouse Air
Assuming the 90 days horizon Hochschild Mining plc is expected to under-perform the Westinghouse Air. In addition to that, Hochschild Mining is 3.12 times more volatile than Westinghouse Air Brake. It trades about 0.0 of its total potential returns per unit of risk. Westinghouse Air Brake is currently generating about 0.18 per unit of volatility. If you would invest 18,645 in Westinghouse Air Brake on September 12, 2024 and sell it today you would earn a total of 770.00 from holding Westinghouse Air Brake or generate 4.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hochschild Mining plc vs. Westinghouse Air Brake
Performance |
| Timeline |
| Hochschild Mining plc |
| Westinghouse Air Brake |
Hochschild Mining and Westinghouse Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochschild Mining and Westinghouse Air
The main advantage of trading using opposite Hochschild Mining and Westinghouse Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochschild Mining position performs unexpectedly, Westinghouse Air 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 Westinghouse Air will offset losses from the drop in Westinghouse Air's long position.| Hochschild Mining vs. Franco Nevada | Hochschild Mining vs. Superior Plus Corp | Hochschild Mining vs. SIVERS SEMICONDUCTORS AB | Hochschild Mining vs. Norsk Hydro ASA |
| Westinghouse Air vs. CSX Corporation | Westinghouse Air vs. Superior Plus Corp | Westinghouse Air vs. SIVERS SEMICONDUCTORS AB | Westinghouse Air vs. Norsk Hydro ASA |
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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