Correlation Between Hochschild Mining and STMicroelectronics
Can any of the company-specific risk be diversified away by investing in both Hochschild Mining and STMicroelectronics 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 STMicroelectronics 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 STMicroelectronics NV, you can compare the effects of market volatilities on Hochschild Mining and STMicroelectronics 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 STMicroelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochschild Mining and STMicroelectronics.
Diversification Opportunities for Hochschild Mining and STMicroelectronics
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hochschild and STMicroelectronics is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Hochschild Mining plc and STMicroelectronics NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STMicroelectronics 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 STMicroelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STMicroelectronics has no effect on the direction of Hochschild Mining i.e., Hochschild Mining and STMicroelectronics go up and down completely randomly.
Pair Corralation between Hochschild Mining and STMicroelectronics
Assuming the 90 days trading horizon Hochschild Mining plc is expected to generate 1.28 times more return on investment than STMicroelectronics. However, Hochschild Mining is 1.28 times more volatile than STMicroelectronics NV. It trades about 0.15 of its potential returns per unit of risk. STMicroelectronics NV is currently generating about -0.12 per unit of risk. If you would invest 10,540 in Hochschild Mining plc on September 1, 2024 and sell it today you would earn a total of 10,860 from holding Hochschild Mining plc or generate 103.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hochschild Mining plc vs. STMicroelectronics NV
Performance |
| Timeline |
| Hochschild Mining plc |
| STMicroelectronics |
Hochschild Mining and STMicroelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochschild Mining and STMicroelectronics
The main advantage of trading using opposite Hochschild Mining and STMicroelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochschild Mining position performs unexpectedly, STMicroelectronics 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 STMicroelectronics will offset losses from the drop in STMicroelectronics' long position.| Hochschild Mining vs. Givaudan SA | Hochschild Mining vs. Antofagasta PLC | Hochschild Mining vs. Centamin PLC | Hochschild Mining vs. Atalaya Mining |
| STMicroelectronics vs. Zoom Video Communications | STMicroelectronics vs. Tyson Foods Cl | STMicroelectronics vs. Fevertree Drinks Plc | STMicroelectronics vs. Aeorema Communications 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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