Correlation Between Polar Capital and Hochschild Mining
Can any of the company-specific risk be diversified away by investing in both Polar Capital 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 Polar Capital and Hochschild Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polar Capital Technology and Hochschild Mining plc, you can compare the effects of market volatilities on Polar Capital 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 Polar Capital with a short position of Hochschild Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polar Capital and Hochschild Mining.
Diversification Opportunities for Polar Capital and Hochschild Mining
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Polar and Hochschild is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Polar Capital Technology 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 Polar Capital 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 Polar Capital Technology 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 Polar Capital i.e., Polar Capital and Hochschild Mining go up and down completely randomly.
Pair Corralation between Polar Capital and Hochschild Mining
Assuming the 90 days trading horizon Polar Capital Technology is expected to generate 0.57 times more return on investment than Hochschild Mining. However, Polar Capital Technology is 1.75 times less risky than Hochschild Mining. It trades about 0.24 of its potential returns per unit of risk. Hochschild Mining plc is currently generating about -0.12 per unit of risk. If you would invest 31,100 in Polar Capital Technology on September 3, 2024 and sell it today you would earn a total of 2,500 from holding Polar Capital Technology or generate 8.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polar Capital Technology vs. Hochschild Mining plc
Performance |
| Timeline |
| Polar Capital Technology |
| Hochschild Mining plc |
Polar Capital and Hochschild Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polar Capital and Hochschild Mining
The main advantage of trading using opposite Polar Capital and Hochschild Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polar Capital 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.| Polar Capital vs. Finnair Oyj | Polar Capital vs. Taylor Maritime Investments | Polar Capital vs. Aeorema Communications Plc | Polar Capital vs. Norwegian Air Shuttle |
| Hochschild Mining vs. Hilton Food Group | Hochschild Mining vs. Odfjell Drilling | Hochschild Mining vs. Premier Foods PLC | Hochschild Mining vs. Axfood AB |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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