Correlation Between HP and Jaguar Mining
Can any of the company-specific risk be diversified away by investing in both HP and Jaguar Mining 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 HP and Jaguar Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HP Inc and Jaguar Mining, you can compare the effects of market volatilities on HP and Jaguar Mining 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 HP with a short position of Jaguar Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of HP and Jaguar Mining.
Diversification Opportunities for HP and Jaguar Mining
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HP and Jaguar is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding HP Inc and Jaguar Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaguar Mining and HP 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 HP Inc are associated (or correlated) with Jaguar Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaguar Mining has no effect on the direction of HP i.e., HP and Jaguar Mining go up and down completely randomly.
Pair Corralation between HP and Jaguar Mining
Considering the 90-day investment horizon HP is expected to generate 10.8 times less return on investment than Jaguar Mining. But when comparing it to its historical volatility, HP Inc is 2.07 times less risky than Jaguar Mining. It trades about 0.02 of its potential returns per unit of risk. Jaguar Mining is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 187.00 in Jaguar Mining on September 1, 2024 and sell it today you would earn a total of 82.00 from holding Jaguar Mining or generate 43.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HP Inc vs. Jaguar Mining
Performance |
| Timeline |
| HP Inc |
| Jaguar Mining |
HP and Jaguar Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HP and Jaguar Mining
The main advantage of trading using opposite HP and Jaguar Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HP position performs unexpectedly, Jaguar Mining 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 Jaguar Mining will offset losses from the drop in Jaguar Mining's long position.The idea behind HP Inc and Jaguar Mining pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Jaguar Mining vs. South32 Limited | Jaguar Mining vs. NioCorp Developments Ltd | Jaguar Mining vs. HUMANA INC | Jaguar Mining vs. SCOR PK |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |