Correlation Between Hochschild Mining and Cincinnati Financial
Can any of the company-specific risk be diversified away by investing in both Hochschild Mining and Cincinnati Financial 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 Cincinnati Financial 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 Cincinnati Financial Corp, you can compare the effects of market volatilities on Hochschild Mining and Cincinnati Financial 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 Cincinnati Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochschild Mining and Cincinnati Financial.
Diversification Opportunities for Hochschild Mining and Cincinnati Financial
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hochschild and Cincinnati is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Hochschild Mining plc and Cincinnati Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cincinnati Financial 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 Cincinnati Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cincinnati Financial Corp has no effect on the direction of Hochschild Mining i.e., Hochschild Mining and Cincinnati Financial go up and down completely randomly.
Pair Corralation between Hochschild Mining and Cincinnati Financial
Assuming the 90 days trading horizon Hochschild Mining plc is expected to generate 2.42 times more return on investment than Cincinnati Financial. However, Hochschild Mining is 2.42 times more volatile than Cincinnati Financial Corp. It trades about 0.05 of its potential returns per unit of risk. Cincinnati Financial Corp is currently generating about -0.03 per unit of risk. If you would invest 22,200 in Hochschild Mining plc on September 12, 2024 and sell it today you would earn a total of 500.00 from holding Hochschild Mining plc or generate 2.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hochschild Mining plc vs. Cincinnati Financial Corp
Performance |
| Timeline |
| Hochschild Mining plc |
| Cincinnati Financial Corp |
Hochschild Mining and Cincinnati Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochschild Mining and Cincinnati Financial
The main advantage of trading using opposite Hochschild Mining and Cincinnati Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochschild Mining position performs unexpectedly, Cincinnati Financial 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 Cincinnati Financial will offset losses from the drop in Cincinnati Financial's long position.| Hochschild Mining vs. Givaudan SA | Hochschild Mining vs. Antofagasta PLC | Hochschild Mining vs. Ferrexpo PLC | Hochschild Mining vs. Atalaya Mining |
| Cincinnati Financial vs. Hong Kong Land | Cincinnati Financial vs. Neometals | Cincinnati Financial vs. Coor Service Management | Cincinnati Financial vs. Fidelity Sustainable USD |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |