Correlation Between Hochschild Mining and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Hochschild Mining and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Hochschild Mining and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochschild Mining and Dow Jones.
Diversification Opportunities for Hochschild Mining and Dow Jones
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hochschild and Dow is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Hochschild Mining plc and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Hochschild Mining i.e., Hochschild Mining and Dow Jones go up and down completely randomly.
Pair Corralation between Hochschild Mining and Dow Jones
Assuming the 90 days trading horizon Hochschild Mining plc is expected to generate 4.44 times more return on investment than Dow Jones. However, Hochschild Mining is 4.44 times more volatile than Dow Jones Industrial. It trades about 0.1 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.12 per unit of risk. If you would invest 8,310 in Hochschild Mining plc on August 31, 2024 and sell it today you would earn a total of 13,090 from holding Hochschild Mining plc or generate 157.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.94% |
| Values | Daily Returns |
Hochschild Mining plc vs. Dow Jones Industrial
Performance |
| Timeline |
Hochschild Mining and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Hochschild Mining plc
Pair trading matchups for Hochschild Mining
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Hochschild Mining and Dow Jones
The main advantage of trading using opposite Hochschild Mining and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochschild Mining position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.The idea behind Hochschild Mining plc and Dow Jones Industrial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |