Correlation Between Hochschild Mining and Eastman Chemical
Can any of the company-specific risk be diversified away by investing in both Hochschild Mining and Eastman Chemical 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 Eastman Chemical 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 Eastman Chemical Co, you can compare the effects of market volatilities on Hochschild Mining and Eastman Chemical 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 Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochschild Mining and Eastman Chemical.
Diversification Opportunities for Hochschild Mining and Eastman Chemical
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hochschild and Eastman is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Hochschild Mining plc and Eastman Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical 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 Eastman Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastman Chemical has no effect on the direction of Hochschild Mining i.e., Hochschild Mining and Eastman Chemical go up and down completely randomly.
Pair Corralation between Hochschild Mining and Eastman Chemical
Assuming the 90 days trading horizon Hochschild Mining plc is expected to under-perform the Eastman Chemical. In addition to that, Hochschild Mining is 2.67 times more volatile than Eastman Chemical Co. It trades about -0.13 of its total potential returns per unit of risk. Eastman Chemical Co is currently generating about -0.23 per unit of volatility. If you would invest 10,383 in Eastman Chemical Co on October 30, 2024 and sell it today you would lose (1,138) from holding Eastman Chemical Co or give up 10.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 92.31% |
| Values | Daily Returns |
Hochschild Mining plc vs. Eastman Chemical Co
Performance |
| Timeline |
| Hochschild Mining plc |
| Eastman Chemical |
Hochschild Mining and Eastman Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochschild Mining and Eastman Chemical
The main advantage of trading using opposite Hochschild Mining and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochschild Mining position performs unexpectedly, Eastman Chemical 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 Eastman Chemical will offset losses from the drop in Eastman Chemical's long position.| Hochschild Mining vs. Xeros Technology Group | Hochschild Mining vs. Beowulf Mining | Hochschild Mining vs. Raytheon Technologies Corp | Hochschild Mining vs. Hecla Mining Co |
| Eastman Chemical vs. Take Two Interactive Software | Eastman Chemical vs. Sabien Technology Group | Eastman Chemical vs. Sabre Insurance Group | Eastman Chemical vs. Auction Technology Group |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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