Correlation Between Hochschild Mining and Greenroc Mining
Can any of the company-specific risk be diversified away by investing in both Hochschild Mining and Greenroc Mining 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 Greenroc Mining 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 Greenroc Mining PLC, you can compare the effects of market volatilities on Hochschild Mining and Greenroc Mining 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 Greenroc Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochschild Mining and Greenroc Mining.
Diversification Opportunities for Hochschild Mining and Greenroc Mining
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hochschild and Greenroc is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Hochschild Mining plc and Greenroc Mining PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenroc Mining 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 Greenroc Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenroc Mining PLC has no effect on the direction of Hochschild Mining i.e., Hochschild Mining and Greenroc Mining go up and down completely randomly.
Pair Corralation between Hochschild Mining and Greenroc Mining
Assuming the 90 days trading horizon Hochschild Mining plc is expected to generate 0.73 times more return on investment than Greenroc Mining. However, Hochschild Mining plc is 1.38 times less risky than Greenroc Mining. It trades about 0.12 of its potential returns per unit of risk. Greenroc Mining PLC is currently generating about 0.07 per unit of risk. If you would invest 17,180 in Hochschild Mining plc on August 30, 2024 and sell it today you would earn a total of 4,070 from holding Hochschild Mining plc or generate 23.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hochschild Mining plc vs. Greenroc Mining PLC
Performance |
| Timeline |
| Hochschild Mining plc |
| Greenroc Mining PLC |
Hochschild Mining and Greenroc Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochschild Mining and Greenroc Mining
The main advantage of trading using opposite Hochschild Mining and Greenroc Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochschild Mining position performs unexpectedly, Greenroc Mining 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 Greenroc Mining will offset losses from the drop in Greenroc Mining's long position.| Hochschild Mining vs. Zegona Communications Plc | Hochschild Mining vs. Deltex Medical Group | Hochschild Mining vs. T Mobile | Hochschild Mining vs. Advanced Medical Solutions |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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