Correlation Between Hochschild Mining and Dominos Pizza
Can any of the company-specific risk be diversified away by investing in both Hochschild Mining and Dominos Pizza 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 Dominos Pizza 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 Dominos Pizza Group, you can compare the effects of market volatilities on Hochschild Mining and Dominos Pizza 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 Dominos Pizza. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochschild Mining and Dominos Pizza.
Diversification Opportunities for Hochschild Mining and Dominos Pizza
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hochschild and Dominos is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Hochschild Mining plc and Dominos Pizza Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dominos Pizza Group 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 Dominos Pizza. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dominos Pizza Group has no effect on the direction of Hochschild Mining i.e., Hochschild Mining and Dominos Pizza go up and down completely randomly.
Pair Corralation between Hochschild Mining and Dominos Pizza
Assuming the 90 days trading horizon Hochschild Mining plc is expected to generate 1.74 times more return on investment than Dominos Pizza. However, Hochschild Mining is 1.74 times more volatile than Dominos Pizza Group. It trades about 0.05 of its potential returns per unit of risk. Dominos Pizza Group is currently generating about 0.04 per unit of risk. If you would invest 18,600 in Hochschild Mining plc on September 3, 2024 and sell it today you would earn a total of 2,850 from holding Hochschild Mining plc or generate 15.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hochschild Mining plc vs. Dominos Pizza Group
Performance |
| Timeline |
| Hochschild Mining plc |
| Dominos Pizza Group |
Hochschild Mining and Dominos Pizza Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochschild Mining and Dominos Pizza
The main advantage of trading using opposite Hochschild Mining and Dominos Pizza positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochschild Mining position performs unexpectedly, Dominos Pizza 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 Dominos Pizza will offset losses from the drop in Dominos Pizza's long position.| Hochschild Mining vs. Hilton Food Group | Hochschild Mining vs. Odfjell Drilling | Hochschild Mining vs. Premier Foods PLC | Hochschild Mining vs. Axfood AB |
| Dominos Pizza vs. Liontrust Asset Management | Dominos Pizza vs. Litigation Capital Management | Dominos Pizza vs. Impax Asset Management | Dominos Pizza vs. JD Sports Fashion |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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