Correlation Between Procter Gamble and Hochschild Mining
Can any of the company-specific risk be diversified away by investing in both Procter Gamble 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 Procter Gamble and Hochschild Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and Hochschild Mining PLC, you can compare the effects of market volatilities on Procter Gamble 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 Procter Gamble with a short position of Hochschild Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Hochschild Mining.
Diversification Opportunities for Procter Gamble and Hochschild Mining
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Procter and Hochschild is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble 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 Procter Gamble 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 Procter Gamble 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 Procter Gamble i.e., Procter Gamble and Hochschild Mining go up and down completely randomly.
Pair Corralation between Procter Gamble and Hochschild Mining
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 0.26 times more return on investment than Hochschild Mining. However, Procter Gamble is 3.81 times less risky than Hochschild Mining. It trades about -0.02 of its potential returns per unit of risk. Hochschild Mining PLC is currently generating about -0.09 per unit of risk. If you would invest 16,930 in Procter Gamble on October 26, 2024 and sell it today you would lose (315.00) from holding Procter Gamble or give up 1.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Procter Gamble vs. Hochschild Mining PLC
Performance |
| Timeline |
| Procter Gamble |
| Hochschild Mining PLC |
Procter Gamble and Hochschild Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Hochschild Mining
The main advantage of trading using opposite Procter Gamble and Hochschild Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble 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.| Procter Gamble vs. The Clorox | Procter Gamble vs. Colgate Palmolive | Procter Gamble vs. Unilever PLC ADR | Procter Gamble vs. Church Dwight |
| Hochschild Mining vs. Radisson Mining Resources | Hochschild Mining vs. Big Ridge Gold | Hochschild Mining vs. Cerrado Gold | Hochschild Mining vs. Orogen Royalties |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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