Correlation Between Hochschild Mining and Alliance Data
Can any of the company-specific risk be diversified away by investing in both Hochschild Mining and Alliance Data 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 Alliance Data 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 Alliance Data Systems, you can compare the effects of market volatilities on Hochschild Mining and Alliance Data 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 Alliance Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochschild Mining and Alliance Data.
Diversification Opportunities for Hochschild Mining and Alliance Data
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hochschild and Alliance is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Hochschild Mining plc and Alliance Data Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliance Data Systems 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 Alliance Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliance Data Systems has no effect on the direction of Hochschild Mining i.e., Hochschild Mining and Alliance Data go up and down completely randomly.
Pair Corralation between Hochschild Mining and Alliance Data
Assuming the 90 days trading horizon Hochschild Mining plc is expected to generate 1.49 times more return on investment than Alliance Data. However, Hochschild Mining is 1.49 times more volatile than Alliance Data Systems. It trades about -0.03 of its potential returns per unit of risk. Alliance Data Systems is currently generating about -0.27 per unit of risk. If you would invest 22,700 in Hochschild Mining plc on October 11, 2024 and sell it today you would lose (500.00) from holding Hochschild Mining plc or give up 2.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.0% |
| Values | Daily Returns |
Hochschild Mining plc vs. Alliance Data Systems
Performance |
| Timeline |
| Hochschild Mining plc |
| Alliance Data Systems |
Hochschild Mining and Alliance Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochschild Mining and Alliance Data
The main advantage of trading using opposite Hochschild Mining and Alliance Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochschild Mining position performs unexpectedly, Alliance Data 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 Alliance Data will offset losses from the drop in Alliance Data's long position.| Hochschild Mining vs. Zinc Media Group | Hochschild Mining vs. Lindsell Train Investment | Hochschild Mining vs. Hollywood Bowl Group | Hochschild Mining vs. Centaur Media |
| Alliance Data vs. Hochschild Mining plc | Alliance Data vs. New Residential Investment | Alliance Data vs. Europa Metals | Alliance Data vs. Coeur Mining |
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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