Correlation Between Hochschild Mining and River
Can any of the company-specific risk be diversified away by investing in both Hochschild Mining and River 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 River 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 River and Mercantile, you can compare the effects of market volatilities on Hochschild Mining and River 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 River. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochschild Mining and River.
Diversification Opportunities for Hochschild Mining and River
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hochschild and River is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Hochschild Mining plc and River and Mercantile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on River and Mercantile 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 River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of River and Mercantile has no effect on the direction of Hochschild Mining i.e., Hochschild Mining and River go up and down completely randomly.
Pair Corralation between Hochschild Mining and River
Assuming the 90 days trading horizon Hochschild Mining plc is expected to generate 2.73 times more return on investment than River. However, Hochschild Mining is 2.73 times more volatile than River and Mercantile. It trades about 0.09 of its potential returns per unit of risk. River and Mercantile is currently generating about 0.03 per unit of risk. If you would invest 6,855 in Hochschild Mining plc on September 3, 2024 and sell it today you would earn a total of 14,595 from holding Hochschild Mining plc or generate 212.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hochschild Mining plc vs. River and Mercantile
Performance |
| Timeline |
| Hochschild Mining plc |
| River and Mercantile |
Hochschild Mining and River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochschild Mining and River
The main advantage of trading using opposite Hochschild Mining and River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochschild Mining position performs unexpectedly, River 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 River will offset losses from the drop in River's long position.| Hochschild Mining vs. Hilton Food Group | Hochschild Mining vs. Odfjell Drilling | Hochschild Mining vs. Premier Foods PLC | Hochschild Mining vs. Axfood AB |
| River vs. SMA Solar Technology | River vs. DXC Technology Co | River vs. Raytheon Technologies Corp | River vs. Grieg Seafood |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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