Correlation Between Hochschild Mining and InterContinental
Can any of the company-specific risk be diversified away by investing in both Hochschild Mining and InterContinental 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 InterContinental 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 InterContinental Hotels Group, you can compare the effects of market volatilities on Hochschild Mining and InterContinental 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 InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochschild Mining and InterContinental.
Diversification Opportunities for Hochschild Mining and InterContinental
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hochschild and InterContinental is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Hochschild Mining plc and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels 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 InterContinental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InterContinental Hotels has no effect on the direction of Hochschild Mining i.e., Hochschild Mining and InterContinental go up and down completely randomly.
Pair Corralation between Hochschild Mining and InterContinental
Assuming the 90 days trading horizon Hochschild Mining plc is expected to generate 2.48 times more return on investment than InterContinental. However, Hochschild Mining is 2.48 times more volatile than InterContinental Hotels Group. It trades about 0.08 of its potential returns per unit of risk. InterContinental Hotels Group is currently generating about 0.11 per unit of risk. If you would invest 8,080 in Hochschild Mining plc on October 14, 2024 and sell it today you would earn a total of 14,270 from holding Hochschild Mining plc or generate 176.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hochschild Mining plc vs. InterContinental Hotels Group
Performance |
| Timeline |
| Hochschild Mining plc |
| InterContinental Hotels |
Hochschild Mining and InterContinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochschild Mining and InterContinental
The main advantage of trading using opposite Hochschild Mining and InterContinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochschild Mining position performs unexpectedly, InterContinental 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 InterContinental will offset losses from the drop in InterContinental's long position.| Hochschild Mining vs. Universal Display Corp | Hochschild Mining vs. Spirent Communications plc | Hochschild Mining vs. URU Metals | Hochschild Mining vs. GreenX Metals |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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