Correlation Between Hochschild Mining and Prudential Plc
Can any of the company-specific risk be diversified away by investing in both Hochschild Mining and Prudential Plc 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 Prudential Plc 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 Prudential plc, you can compare the effects of market volatilities on Hochschild Mining and Prudential Plc 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 Prudential Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochschild Mining and Prudential Plc.
Diversification Opportunities for Hochschild Mining and Prudential Plc
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hochschild and Prudential is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Hochschild Mining plc and Prudential plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential 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 Prudential Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential plc has no effect on the direction of Hochschild Mining i.e., Hochschild Mining and Prudential Plc go up and down completely randomly.
Pair Corralation between Hochschild Mining and Prudential Plc
Assuming the 90 days trading horizon Hochschild Mining is expected to generate 1.16 times less return on investment than Prudential Plc. In addition to that, Hochschild Mining is 1.18 times more volatile than Prudential plc. It trades about 0.1 of its total potential returns per unit of risk. Prudential plc is currently generating about 0.13 per unit of volatility. If you would invest 63,300 in Prudential plc on October 23, 2024 and sell it today you would earn a total of 2,860 from holding Prudential plc or generate 4.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Hochschild Mining plc vs. Prudential plc
Performance |
| Timeline |
| Hochschild Mining plc |
| Prudential plc |
Hochschild Mining and Prudential Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochschild Mining and Prudential Plc
The main advantage of trading using opposite Hochschild Mining and Prudential Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochschild Mining position performs unexpectedly, Prudential Plc 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 Prudential Plc will offset losses from the drop in Prudential Plc's long position.| Hochschild Mining vs. Givaudan SA | Hochschild Mining vs. Antofagasta PLC | Hochschild Mining vs. Ferrexpo PLC | Hochschild Mining vs. Atalaya Mining |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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