Correlation Between Hochschild Mining and Hansa Trust
Can any of the company-specific risk be diversified away by investing in both Hochschild Mining and Hansa Trust 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 Hansa Trust 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 Hansa Trust, you can compare the effects of market volatilities on Hochschild Mining and Hansa Trust 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 Hansa Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochschild Mining and Hansa Trust.
Diversification Opportunities for Hochschild Mining and Hansa Trust
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hochschild and Hansa is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Hochschild Mining plc and Hansa Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansa Trust 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 Hansa Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansa Trust has no effect on the direction of Hochschild Mining i.e., Hochschild Mining and Hansa Trust go up and down completely randomly.
Pair Corralation between Hochschild Mining and Hansa Trust
Assuming the 90 days trading horizon Hochschild Mining plc is expected to generate 1.92 times more return on investment than Hansa Trust. However, Hochschild Mining is 1.92 times more volatile than Hansa Trust. It trades about 0.18 of its potential returns per unit of risk. Hansa Trust is currently generating about -0.06 per unit of risk. If you would invest 21,450 in Hochschild Mining plc on September 13, 2024 and sell it today you would earn a total of 2,450 from holding Hochschild Mining plc or generate 11.42% 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. Hansa Trust
Performance |
| Timeline |
| Hochschild Mining plc |
| Hansa Trust |
Hochschild Mining and Hansa Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochschild Mining and Hansa Trust
The main advantage of trading using opposite Hochschild Mining and Hansa Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochschild Mining position performs unexpectedly, Hansa Trust 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 Hansa Trust will offset losses from the drop in Hansa Trust's long position.| Hochschild Mining vs. Givaudan SA | Hochschild Mining vs. Antofagasta PLC | Hochschild Mining vs. Ferrexpo PLC | Hochschild Mining vs. Atalaya Mining |
| Hansa Trust vs. Samsung Electronics Co | Hansa Trust vs. Samsung Electronics Co | Hansa Trust vs. Hyundai Motor | Hansa Trust vs. Toyota Motor Corp |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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