Correlation Between Lindsell Train and Hochschild Mining
Can any of the company-specific risk be diversified away by investing in both Lindsell Train and Hochschild 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 Lindsell Train and Hochschild Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lindsell Train Investment and Hochschild Mining plc, you can compare the effects of market volatilities on Lindsell Train and Hochschild 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 Lindsell Train with a short position of Hochschild Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindsell Train and Hochschild Mining.
Diversification Opportunities for Lindsell Train and Hochschild Mining
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lindsell and Hochschild is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Lindsell Train Investment and Hochschild Mining plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hochschild Mining plc and Lindsell Train 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 Lindsell Train Investment are associated (or correlated) with Hochschild Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hochschild Mining plc has no effect on the direction of Lindsell Train i.e., Lindsell Train and Hochschild Mining go up and down completely randomly.
Pair Corralation between Lindsell Train and Hochschild Mining
Assuming the 90 days trading horizon Lindsell Train Investment is expected to under-perform the Hochschild Mining. But the stock apears to be less risky and, when comparing its historical volatility, Lindsell Train Investment is 2.16 times less risky than Hochschild Mining. The stock trades about -0.02 of its potential returns per unit of risk. The Hochschild Mining plc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 6,515 in Hochschild Mining plc on October 26, 2024 and sell it today you would earn a total of 11,465 from holding Hochschild Mining plc or generate 175.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lindsell Train Investment vs. Hochschild Mining plc
Performance |
| Timeline |
| Lindsell Train Investment |
| Hochschild Mining plc |
Lindsell Train and Hochschild Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lindsell Train and Hochschild Mining
The main advantage of trading using opposite Lindsell Train and Hochschild Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lindsell Train position performs unexpectedly, Hochschild 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 Hochschild Mining will offset losses from the drop in Hochschild Mining's long position.| Lindsell Train vs. Gaztransport et Technigaz | Lindsell Train vs. Auto Trader Group | Lindsell Train vs. Thor Mining PLC | Lindsell Train vs. Flow Traders NV |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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