Correlation Between Hudbay Minerals and Aguila American
Can any of the company-specific risk be diversified away by investing in both Hudbay Minerals and Aguila American 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 Aguila American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hudbay Minerals and Aguila American Gold, you can compare the effects of market volatilities on Hudbay Minerals and Aguila American 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 Aguila American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hudbay Minerals and Aguila American.
Diversification Opportunities for Hudbay Minerals and Aguila American
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hudbay and Aguila is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Hudbay Minerals and Aguila American Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aguila American Gold 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 Aguila American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aguila American Gold has no effect on the direction of Hudbay Minerals i.e., Hudbay Minerals and Aguila American go up and down completely randomly.
Pair Corralation between Hudbay Minerals and Aguila American
Considering the 90-day investment horizon Hudbay Minerals is expected to generate 3.73 times less return on investment than Aguila American. But when comparing it to its historical volatility, Hudbay Minerals is 1.46 times less risky than Aguila American. It trades about 0.07 of its potential returns per unit of risk. Aguila American Gold is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 21.00 in Aguila American Gold on August 25, 2024 and sell it today you would earn a total of 7.00 from holding Aguila American Gold or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 67.19% |
| Values | Daily Returns |
Hudbay Minerals vs. Aguila American Gold
Performance |
| Timeline |
| Hudbay Minerals |
| Aguila American Gold |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Hudbay Minerals and Aguila American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hudbay Minerals and Aguila American
The main advantage of trading using opposite Hudbay Minerals and Aguila American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hudbay Minerals position performs unexpectedly, Aguila American 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 Aguila American will offset losses from the drop in Aguila American's long position.| Hudbay Minerals vs. Teck Resources Ltd | Hudbay Minerals vs. Fortuna Silver Mines | Hudbay Minerals vs. Osisko Gold Ro | Hudbay Minerals vs. Nexa Resources SA |
| Aguila American vs. Bell Copper | Aguila American vs. CopperCorp Resources | Aguila American vs. Copper Fox Metals | Aguila American vs. First Quantum Minerals |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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