Correlation Between Hochschild Mining and Erste Group
Can any of the company-specific risk be diversified away by investing in both Hochschild Mining and Erste Group 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 Erste Group 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 Erste Group Bank, you can compare the effects of market volatilities on Hochschild Mining and Erste Group 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 Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochschild Mining and Erste Group.
Diversification Opportunities for Hochschild Mining and Erste Group
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hochschild and Erste is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Hochschild Mining plc and Erste Group Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erste Group Bank 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 Erste Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erste Group Bank has no effect on the direction of Hochschild Mining i.e., Hochschild Mining and Erste Group go up and down completely randomly.
Pair Corralation between Hochschild Mining and Erste Group
Assuming the 90 days trading horizon Hochschild Mining plc is expected to generate 2.25 times more return on investment than Erste Group. However, Hochschild Mining is 2.25 times more volatile than Erste Group Bank. It trades about 0.06 of its potential returns per unit of risk. Erste Group Bank is currently generating about 0.11 per unit of risk. If you would invest 21,600 in Hochschild Mining plc on October 20, 2024 and sell it today you would earn a total of 450.00 from holding Hochschild Mining plc or generate 2.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hochschild Mining plc vs. Erste Group Bank
Performance |
| Timeline |
| Hochschild Mining plc |
| Erste Group Bank |
Hochschild Mining and Erste Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochschild Mining and Erste Group
The main advantage of trading using opposite Hochschild Mining and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochschild Mining position performs unexpectedly, Erste Group 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 Erste Group will offset losses from the drop in Erste Group's long position.| Hochschild Mining vs. Playtech Plc | Hochschild Mining vs. METALL ZUG AG | Hochschild Mining vs. JB Hunt Transport | Hochschild Mining vs. Kaufman Et Broad |
| Erste Group vs. Spotify Technology SA | Erste Group vs. Hochschild Mining plc | Erste Group vs. Air Products Chemicals | Erste Group vs. Alfa Financial Software |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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