Correlation Between Newmont and Hochschild Mining
Can any of the company-specific risk be diversified away by investing in both Newmont 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 Newmont and Hochschild Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newmont and Hochschild Mining plc, you can compare the effects of market volatilities on Newmont 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 Newmont with a short position of Hochschild Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newmont and Hochschild Mining.
Diversification Opportunities for Newmont and Hochschild Mining
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Newmont and Hochschild is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Newmont 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 Newmont 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 Newmont 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 Newmont i.e., Newmont and Hochschild Mining go up and down completely randomly.
Pair Corralation between Newmont and Hochschild Mining
Assuming the 90 days horizon Newmont is expected to under-perform the Hochschild Mining. But the stock apears to be less risky and, when comparing its historical volatility, Newmont is 1.54 times less risky than Hochschild Mining. The stock trades about 0.0 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 93.00 in Hochschild Mining plc on October 15, 2024 and sell it today you would earn a total of 176.00 from holding Hochschild Mining plc or generate 189.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newmont vs. Hochschild Mining plc
Performance |
| Timeline |
| Newmont |
| Hochschild Mining plc |
Newmont and Hochschild Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newmont and Hochschild Mining
The main advantage of trading using opposite Newmont and Hochschild Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newmont 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.| Newmont vs. The Home Depot | Newmont vs. Hisense Home Appliances | Newmont vs. alstria office REIT AG | Newmont vs. American Homes 4 |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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