Correlation Between Hochschild Mining and Axfood AB
Can any of the company-specific risk be diversified away by investing in both Hochschild Mining and Axfood AB 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 Axfood AB 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 Axfood AB, you can compare the effects of market volatilities on Hochschild Mining and Axfood AB 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 Axfood AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochschild Mining and Axfood AB.
Diversification Opportunities for Hochschild Mining and Axfood AB
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hochschild and Axfood is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Hochschild Mining plc and Axfood AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axfood AB 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 Axfood AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axfood AB has no effect on the direction of Hochschild Mining i.e., Hochschild Mining and Axfood AB go up and down completely randomly.
Pair Corralation between Hochschild Mining and Axfood AB
Assuming the 90 days trading horizon Hochschild Mining plc is expected to generate 4.12 times more return on investment than Axfood AB. However, Hochschild Mining is 4.12 times more volatile than Axfood AB. It trades about 0.02 of its potential returns per unit of risk. Axfood AB is currently generating about -0.13 per unit of risk. If you would invest 21,650 in Hochschild Mining plc on September 19, 2024 and sell it today you would earn a total of 50.00 from holding Hochschild Mining plc or generate 0.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hochschild Mining plc vs. Axfood AB
Performance |
| Timeline |
| Hochschild Mining plc |
| Axfood AB |
Hochschild Mining and Axfood AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochschild Mining and Axfood AB
The main advantage of trading using opposite Hochschild Mining and Axfood AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochschild Mining position performs unexpectedly, Axfood AB 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 Axfood AB will offset losses from the drop in Axfood AB's long position.| Hochschild Mining vs. New Residential Investment | Hochschild Mining vs. Aberdeen Diversified Income | Hochschild Mining vs. DXC Technology Co | Hochschild Mining vs. TechnipFMC PLC |
| Axfood AB vs. Martin Marietta Materials | Axfood AB vs. Beazer Homes USA | Axfood AB vs. Worldwide Healthcare Trust | Axfood AB vs. Abingdon Health 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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