Correlation Between HudBay Minerals and Nexa Resources
Can any of the company-specific risk be diversified away by investing in both HudBay Minerals and Nexa Resources 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 HudBay Minerals and Nexa Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HudBay Minerals and Nexa Resources SA, you can compare the effects of market volatilities on HudBay Minerals and Nexa Resources 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 HudBay Minerals with a short position of Nexa Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of HudBay Minerals and Nexa Resources.
Diversification Opportunities for HudBay Minerals and Nexa Resources
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between HudBay and Nexa is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding HudBay Minerals and Nexa Resources SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexa Resources SA and HudBay Minerals 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 HudBay Minerals are associated (or correlated) with Nexa Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexa Resources SA has no effect on the direction of HudBay Minerals i.e., HudBay Minerals and Nexa Resources go up and down completely randomly.
Pair Corralation between HudBay Minerals and Nexa Resources
Assuming the 90 days trading horizon HudBay Minerals is expected to generate 0.39 times more return on investment than Nexa Resources. However, HudBay Minerals is 2.55 times less risky than Nexa Resources. It trades about 0.23 of its potential returns per unit of risk. Nexa Resources SA is currently generating about -0.2 per unit of risk. If you would invest 1,140 in HudBay Minerals on October 20, 2024 and sell it today you would earn a total of 103.00 from holding HudBay Minerals or generate 9.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
HudBay Minerals vs. Nexa Resources SA
Performance |
| Timeline |
| HudBay Minerals |
| Nexa Resources SA |
HudBay Minerals and Nexa Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HudBay Minerals and Nexa Resources
The main advantage of trading using opposite HudBay Minerals and Nexa Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HudBay Minerals position performs unexpectedly, Nexa Resources 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 Nexa Resources will offset losses from the drop in Nexa Resources' long position.| HudBay Minerals vs. Lundin Mining | HudBay Minerals vs. First Quantum Minerals | HudBay Minerals vs. Ivanhoe Mines | HudBay Minerals vs. Capstone Mining Corp |
| Nexa Resources vs. Materion | Nexa Resources vs. Fury Gold Mines | Nexa Resources vs. Eskay Mining Corp | Nexa Resources vs. EMX Royalty Corp |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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