Correlation Between Hochschild Mining and Catena Media
Can any of the company-specific risk be diversified away by investing in both Hochschild Mining and Catena Media 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 Catena Media 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 Catena Media PLC, you can compare the effects of market volatilities on Hochschild Mining and Catena Media 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 Catena Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochschild Mining and Catena Media.
Diversification Opportunities for Hochschild Mining and Catena Media
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hochschild and Catena is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Hochschild Mining plc and Catena Media PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catena Media PLC 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 Catena Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catena Media PLC has no effect on the direction of Hochschild Mining i.e., Hochschild Mining and Catena Media go up and down completely randomly.
Pair Corralation between Hochschild Mining and Catena Media
Assuming the 90 days trading horizon Hochschild Mining plc is expected to generate 0.74 times more return on investment than Catena Media. However, Hochschild Mining plc is 1.36 times less risky than Catena Media. It trades about -0.12 of its potential returns per unit of risk. Catena Media PLC is currently generating about -0.21 per unit of risk. If you would invest 23,100 in Hochschild Mining plc on August 31, 2024 and sell it today you would lose (1,750) from holding Hochschild Mining plc or give up 7.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hochschild Mining plc vs. Catena Media PLC
Performance |
| Timeline |
| Hochschild Mining plc |
| Catena Media PLC |
Hochschild Mining and Catena Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochschild Mining and Catena Media
The main advantage of trading using opposite Hochschild Mining and Catena Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochschild Mining position performs unexpectedly, Catena Media 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 Catena Media will offset losses from the drop in Catena Media's long position.| Hochschild Mining vs. Centamin PLC | Hochschild Mining vs. Anglo Asian Mining | Hochschild Mining vs. Metals Exploration Plc |
| Catena Media vs. Neometals | Catena Media vs. Coor Service Management | Catena Media vs. Aeorema Communications Plc | Catena Media vs. JLEN Environmental Assets |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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