Correlation Between Hochschild Mining and Fresenius Medical
Can any of the company-specific risk be diversified away by investing in both Hochschild Mining and Fresenius Medical 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 Fresenius Medical 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 Fresenius Medical Care, you can compare the effects of market volatilities on Hochschild Mining and Fresenius Medical 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 Fresenius Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochschild Mining and Fresenius Medical.
Diversification Opportunities for Hochschild Mining and Fresenius Medical
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hochschild and Fresenius is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Hochschild Mining plc and Fresenius Medical Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresenius Medical Care 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 Fresenius Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresenius Medical Care has no effect on the direction of Hochschild Mining i.e., Hochschild Mining and Fresenius Medical go up and down completely randomly.
Pair Corralation between Hochschild Mining and Fresenius Medical
Assuming the 90 days trading horizon Hochschild Mining is expected to generate 1.12 times less return on investment than Fresenius Medical. In addition to that, Hochschild Mining is 1.84 times more volatile than Fresenius Medical Care. It trades about 0.06 of its total potential returns per unit of risk. Fresenius Medical Care is currently generating about 0.13 per unit of volatility. If you would invest 3,526 in Fresenius Medical Care on September 19, 2024 and sell it today you would earn a total of 980.00 from holding Fresenius Medical Care or generate 27.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hochschild Mining plc vs. Fresenius Medical Care
Performance |
| Timeline |
| Hochschild Mining plc |
| Fresenius Medical Care |
Hochschild Mining and Fresenius Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochschild Mining and Fresenius Medical
The main advantage of trading using opposite Hochschild Mining and Fresenius Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochschild Mining position performs unexpectedly, Fresenius Medical 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 Fresenius Medical will offset losses from the drop in Fresenius Medical's long position.| Hochschild Mining vs. UNIQA Insurance Group | Hochschild Mining vs. Monster Beverage Corp | Hochschild Mining vs. Flow Traders NV | Hochschild Mining vs. Auto Trader Group |
| Fresenius Medical vs. Samsung Electronics Co | Fresenius Medical vs. Samsung Electronics Co | Fresenius Medical vs. Hyundai Motor | Fresenius Medical vs. Reliance Industries Ltd |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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