Correlation Between Hochschild Mining and Discover Financial
Can any of the company-specific risk be diversified away by investing in both Hochschild Mining and Discover 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 Discover 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 Discover Financial Services, you can compare the effects of market volatilities on Hochschild Mining and Discover 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 Discover Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochschild Mining and Discover Financial.
Diversification Opportunities for Hochschild Mining and Discover Financial
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hochschild and Discover is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Hochschild Mining plc and Discover Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Discover Financial 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 Discover Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Discover Financial has no effect on the direction of Hochschild Mining i.e., Hochschild Mining and Discover Financial go up and down completely randomly.
Pair Corralation between Hochschild Mining and Discover Financial
Assuming the 90 days trading horizon Hochschild Mining plc is expected to under-perform the Discover Financial. But the stock apears to be less risky and, when comparing its historical volatility, Hochschild Mining plc is 1.51 times less risky than Discover Financial. The stock trades about -0.11 of its potential returns per unit of risk. The Discover Financial Services is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 15,014 in Discover Financial Services on September 2, 2024 and sell it today you would earn a total of 3,229 from holding Discover Financial Services or generate 21.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Hochschild Mining plc vs. Discover Financial Services
Performance |
| Timeline |
| Hochschild Mining plc |
| Discover Financial |
Hochschild Mining and Discover Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochschild Mining and Discover Financial
The main advantage of trading using opposite Hochschild Mining and Discover Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochschild Mining position performs unexpectedly, Discover 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 Discover Financial will offset losses from the drop in Discover Financial's long position.| Hochschild Mining vs. Givaudan SA | Hochschild Mining vs. Antofagasta PLC | Hochschild Mining vs. Centamin PLC | Hochschild Mining vs. Atalaya Mining |
| Discover Financial vs. Uniper SE | Discover Financial vs. Mulberry Group PLC | Discover Financial vs. London Security Plc | Discover Financial vs. Triad Group PLC |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |