Correlation Between Hochschild Mining and Ball Corp
Can any of the company-specific risk be diversified away by investing in both Hochschild Mining and Ball Corp 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 Ball Corp 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 Ball Corp, you can compare the effects of market volatilities on Hochschild Mining and Ball Corp 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 Ball Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochschild Mining and Ball Corp.
Diversification Opportunities for Hochschild Mining and Ball Corp
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hochschild and Ball is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Hochschild Mining plc and Ball Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ball Corp 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 Ball Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ball Corp has no effect on the direction of Hochschild Mining i.e., Hochschild Mining and Ball Corp go up and down completely randomly.
Pair Corralation between Hochschild Mining and Ball Corp
Assuming the 90 days trading horizon Hochschild Mining plc is expected to generate 1.62 times more return on investment than Ball Corp. However, Hochschild Mining is 1.62 times more volatile than Ball Corp. It trades about 0.1 of its potential returns per unit of risk. Ball Corp is currently generating about -0.08 per unit of risk. If you would invest 21,300 in Hochschild Mining plc on October 22, 2024 and sell it today you would earn a total of 750.00 from holding Hochschild Mining plc or generate 3.52% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 94.44% |
Values | Daily Returns |
Hochschild Mining plc vs. Ball Corp
Performance |
Timeline |
Hochschild Mining plc |
Ball Corp |
Hochschild Mining and Ball Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hochschild Mining and Ball Corp
The main advantage of trading using opposite Hochschild Mining and Ball Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochschild Mining position performs unexpectedly, Ball Corp 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 Ball Corp will offset losses from the drop in Ball Corp's long position.Hochschild Mining vs. Vietnam Enterprise Investments | Hochschild Mining vs. Smithson Investment Trust | Hochschild Mining vs. National Beverage Corp | Hochschild Mining vs. Aptitude Software Group |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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