Correlation Between Hochschild Mining and DG Innovate
Can any of the company-specific risk be diversified away by investing in both Hochschild Mining and DG Innovate 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 DG Innovate 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 DG Innovate PLC, you can compare the effects of market volatilities on Hochschild Mining and DG Innovate 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 DG Innovate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochschild Mining and DG Innovate.
Diversification Opportunities for Hochschild Mining and DG Innovate
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hochschild and DGI is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Hochschild Mining plc and DG Innovate PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DG Innovate 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 DG Innovate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DG Innovate PLC has no effect on the direction of Hochschild Mining i.e., Hochschild Mining and DG Innovate go up and down completely randomly.
Pair Corralation between Hochschild Mining and DG Innovate
Assuming the 90 days trading horizon Hochschild Mining plc is expected to generate 0.61 times more return on investment than DG Innovate. However, Hochschild Mining plc is 1.64 times less risky than DG Innovate. It trades about 0.08 of its potential returns per unit of risk. DG Innovate PLC is currently generating about 0.02 per unit of risk. If you would invest 19,400 in Hochschild Mining plc on August 25, 2024 and sell it today you would earn a total of 3,000 from holding Hochschild Mining plc or generate 15.46% 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. DG Innovate PLC
Performance |
| Timeline |
| Hochschild Mining plc |
| DG Innovate PLC |
Hochschild Mining and DG Innovate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochschild Mining and DG Innovate
The main advantage of trading using opposite Hochschild Mining and DG Innovate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochschild Mining position performs unexpectedly, DG Innovate 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 DG Innovate will offset losses from the drop in DG Innovate's long position.| Hochschild Mining vs. Givaudan SA | Hochschild Mining vs. Antofagasta PLC | Hochschild Mining vs. Centamin PLC | Hochschild Mining vs. Atalaya Mining |
| DG Innovate vs. GoldMining | DG Innovate vs. STMicroelectronics NV | DG Innovate vs. Hochschild Mining plc | DG Innovate vs. Jacquet Metal Service |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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