Correlation Between Hochschild Mining and Bytes Technology
Can any of the company-specific risk be diversified away by investing in both Hochschild Mining and Bytes Technology 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 Bytes Technology 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 Bytes Technology, you can compare the effects of market volatilities on Hochschild Mining and Bytes Technology 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 Bytes Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochschild Mining and Bytes Technology.
Diversification Opportunities for Hochschild Mining and Bytes Technology
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hochschild and Bytes is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Hochschild Mining plc and Bytes Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bytes Technology 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 Bytes Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bytes Technology has no effect on the direction of Hochschild Mining i.e., Hochschild Mining and Bytes Technology go up and down completely randomly.
Pair Corralation between Hochschild Mining and Bytes Technology
Assuming the 90 days trading horizon Hochschild Mining plc is expected to generate 1.76 times more return on investment than Bytes Technology. However, Hochschild Mining is 1.76 times more volatile than Bytes Technology. It trades about 0.11 of its potential returns per unit of risk. Bytes Technology is currently generating about -0.13 per unit of risk. If you would invest 20,000 in Hochschild Mining plc on September 15, 2024 and sell it today you would earn a total of 1,300 from holding Hochschild Mining plc or generate 6.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hochschild Mining plc vs. Bytes Technology
Performance |
| Timeline |
| Hochschild Mining plc |
| Bytes Technology |
Hochschild Mining and Bytes Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochschild Mining and Bytes Technology
The main advantage of trading using opposite Hochschild Mining and Bytes Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochschild Mining position performs unexpectedly, Bytes Technology 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 Bytes Technology will offset losses from the drop in Bytes Technology's long position.| Hochschild Mining vs. Fevertree Drinks Plc | Hochschild Mining vs. Gaztransport et Technigaz | Hochschild Mining vs. TechnipFMC PLC | Hochschild Mining vs. Jacquet Metal Service |
| Bytes Technology vs. Quadrise Plc | Bytes Technology vs. ImmuPharma PLC | Bytes Technology vs. Intuitive Investments Group | Bytes Technology vs. European Metals Holdings |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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