Correlation Between Metals Exploration and Hochschild Mining
Can any of the company-specific risk be diversified away by investing in both Metals Exploration 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 Metals Exploration and Hochschild Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metals Exploration Plc and Hochschild Mining plc, you can compare the effects of market volatilities on Metals Exploration 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 Metals Exploration with a short position of Hochschild Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metals Exploration and Hochschild Mining.
Diversification Opportunities for Metals Exploration and Hochschild Mining
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Metals and Hochschild is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Metals Exploration Plc 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 Metals Exploration 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 Metals Exploration Plc 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 Metals Exploration i.e., Metals Exploration and Hochschild Mining go up and down completely randomly.
Pair Corralation between Metals Exploration and Hochschild Mining
Assuming the 90 days trading horizon Metals Exploration is expected to generate 1.04 times less return on investment than Hochschild Mining. In addition to that, Metals Exploration is 1.07 times more volatile than Hochschild Mining plc. It trades about 0.1 of its total potential returns per unit of risk. Hochschild Mining plc is currently generating about 0.11 per unit of volatility. If you would invest 18,720 in Hochschild Mining plc on August 28, 2024 and sell it today you would earn a total of 2,530 from holding Hochschild Mining plc or generate 13.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metals Exploration Plc vs. Hochschild Mining plc
Performance |
| Timeline |
| Metals Exploration Plc |
| Hochschild Mining plc |
Metals Exploration and Hochschild Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metals Exploration and Hochschild Mining
The main advantage of trading using opposite Metals Exploration and Hochschild Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metals Exploration 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.| Metals Exploration vs. Givaudan SA | Metals Exploration vs. Antofagasta PLC | Metals Exploration vs. Centamin PLC | Metals Exploration vs. Atalaya Mining |
| Hochschild Mining vs. Greenroc Mining PLC | Hochschild Mining vs. Wheaton Precious Metals | Hochschild Mining vs. T Mobile | Hochschild Mining vs. Zoom Video Communications |
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 Stocks Directory module to find actively traded stocks across global markets.
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