Correlation Between NESTE OYJ and Hochschild Mining
Can any of the company-specific risk be diversified away by investing in both NESTE OYJ 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 NESTE OYJ and Hochschild Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NESTE OYJ UNSPADR and Hochschild Mining plc, you can compare the effects of market volatilities on NESTE OYJ 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 NESTE OYJ with a short position of Hochschild Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of NESTE OYJ and Hochschild Mining.
Diversification Opportunities for NESTE OYJ and Hochschild Mining
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NESTE and Hochschild is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding NESTE OYJ UNSPADR 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 NESTE OYJ 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 NESTE OYJ UNSPADR 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 NESTE OYJ i.e., NESTE OYJ and Hochschild Mining go up and down completely randomly.
Pair Corralation between NESTE OYJ and Hochschild Mining
Assuming the 90 days trading horizon NESTE OYJ UNSPADR is expected to under-perform the Hochschild Mining. But the stock apears to be less risky and, when comparing its historical volatility, NESTE OYJ UNSPADR is 1.48 times less risky than Hochschild Mining. The stock trades about -0.29 of its potential returns per unit of risk. The Hochschild Mining plc is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 276.00 in Hochschild Mining plc on September 20, 2024 and sell it today you would lose (17.00) from holding Hochschild Mining plc or give up 6.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
NESTE OYJ UNSPADR vs. Hochschild Mining plc
Performance |
| Timeline |
| NESTE OYJ UNSPADR |
| Hochschild Mining plc |
NESTE OYJ and Hochschild Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NESTE OYJ and Hochschild Mining
The main advantage of trading using opposite NESTE OYJ and Hochschild Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NESTE OYJ 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.| NESTE OYJ vs. UNITED RENTALS | NESTE OYJ vs. Japan Post Insurance | NESTE OYJ vs. United Rentals | NESTE OYJ vs. ULTRA CLEAN HLDGS |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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