Correlation Between Hochschild Mining and F5 Networks
Can any of the company-specific risk be diversified away by investing in both Hochschild Mining and F5 Networks 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 F5 Networks 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 F5 Networks, you can compare the effects of market volatilities on Hochschild Mining and F5 Networks 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 F5 Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochschild Mining and F5 Networks.
Diversification Opportunities for Hochschild Mining and F5 Networks
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hochschild and 0IL6 is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Hochschild Mining plc and F5 Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on F5 Networks 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 F5 Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of F5 Networks has no effect on the direction of Hochschild Mining i.e., Hochschild Mining and F5 Networks go up and down completely randomly.
Pair Corralation between Hochschild Mining and F5 Networks
Assuming the 90 days trading horizon Hochschild Mining plc is expected to generate 1.99 times more return on investment than F5 Networks. However, Hochschild Mining is 1.99 times more volatile than F5 Networks. It trades about 0.09 of its potential returns per unit of risk. F5 Networks is currently generating about 0.08 per unit of risk. If you would invest 6,470 in Hochschild Mining plc on September 2, 2024 and sell it today you would earn a total of 14,930 from holding Hochschild Mining plc or generate 230.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.39% |
| Values | Daily Returns |
Hochschild Mining plc vs. F5 Networks
Performance |
| Timeline |
| Hochschild Mining plc |
| F5 Networks |
Hochschild Mining and F5 Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochschild Mining and F5 Networks
The main advantage of trading using opposite Hochschild Mining and F5 Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochschild Mining position performs unexpectedly, F5 Networks 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 F5 Networks will offset losses from the drop in F5 Networks' long position.| Hochschild Mining vs. Givaudan SA | Hochschild Mining vs. Antofagasta PLC | Hochschild Mining vs. Centamin PLC | Hochschild Mining vs. Atalaya Mining |
| F5 Networks vs. Atresmedia | F5 Networks vs. Infrastrutture Wireless Italiane | F5 Networks vs. Cairo Communication SpA | F5 Networks vs. One Media iP |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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