Correlation Between Hochschild Mining and Kitwave Group
Can any of the company-specific risk be diversified away by investing in both Hochschild Mining and Kitwave Group 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 Kitwave Group 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 Kitwave Group PLC, you can compare the effects of market volatilities on Hochschild Mining and Kitwave Group 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 Kitwave Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochschild Mining and Kitwave Group.
Diversification Opportunities for Hochschild Mining and Kitwave Group
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hochschild and Kitwave is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Hochschild Mining plc and Kitwave Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kitwave Group 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 Kitwave Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kitwave Group PLC has no effect on the direction of Hochschild Mining i.e., Hochschild Mining and Kitwave Group go up and down completely randomly.
Pair Corralation between Hochschild Mining and Kitwave Group
Assuming the 90 days trading horizon Hochschild Mining plc is expected to generate 1.36 times more return on investment than Kitwave Group. However, Hochschild Mining is 1.36 times more volatile than Kitwave Group PLC. It trades about 0.05 of its potential returns per unit of risk. Kitwave Group PLC is currently generating about -0.03 per unit of risk. If you would invest 18,800 in Hochschild Mining plc on August 30, 2024 and sell it today you would earn a total of 2,550 from holding Hochschild Mining plc or generate 13.56% 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. Kitwave Group PLC
Performance |
| Timeline |
| Hochschild Mining plc |
| Kitwave Group PLC |
Hochschild Mining and Kitwave Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochschild Mining and Kitwave Group
The main advantage of trading using opposite Hochschild Mining and Kitwave Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochschild Mining position performs unexpectedly, Kitwave Group 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 Kitwave Group will offset losses from the drop in Kitwave Group's long position.| Hochschild Mining vs. Bankers Investment Trust | Hochschild Mining vs. Beowulf Mining | Hochschild Mining vs. Federal Realty Investment | Hochschild Mining vs. Eastinco Mining Exploration |
| Kitwave Group vs. OneSavings Bank PLC | Kitwave Group vs. JB Hunt Transport | Kitwave Group vs. Discover Financial Services | Kitwave Group vs. Summit Materials Cl |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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