Correlation Between International Tower and Hudbay Minerals
Can any of the company-specific risk be diversified away by investing in both International Tower and Hudbay Minerals 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 International Tower and Hudbay Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Tower Hill and Hudbay Minerals, you can compare the effects of market volatilities on International Tower and Hudbay Minerals 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 International Tower with a short position of Hudbay Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Tower and Hudbay Minerals.
Diversification Opportunities for International Tower and Hudbay Minerals
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between International and Hudbay is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding International Tower Hill and Hudbay Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudbay Minerals and International Tower 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 International Tower Hill are associated (or correlated) with Hudbay Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hudbay Minerals has no effect on the direction of International Tower i.e., International Tower and Hudbay Minerals go up and down completely randomly.
Pair Corralation between International Tower and Hudbay Minerals
Considering the 90-day investment horizon International Tower Hill is expected to under-perform the Hudbay Minerals. In addition to that, International Tower is 1.84 times more volatile than Hudbay Minerals. It trades about -0.21 of its total potential returns per unit of risk. Hudbay Minerals is currently generating about -0.01 per unit of volatility. If you would invest 906.00 in Hudbay Minerals on September 2, 2024 and sell it today you would lose (12.00) from holding Hudbay Minerals or give up 1.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Tower Hill vs. Hudbay Minerals
Performance |
| Timeline |
| International Tower Hill |
| Hudbay Minerals |
International Tower and Hudbay Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Tower and Hudbay Minerals
The main advantage of trading using opposite International Tower and Hudbay Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Tower position performs unexpectedly, Hudbay Minerals 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 Hudbay Minerals will offset losses from the drop in Hudbay Minerals' long position.| International Tower vs. Fortitude Gold Corp | International Tower vs. New Gold | International Tower vs. Galiano Gold | International Tower vs. GoldMining |
| Hudbay Minerals vs. Paramount Gold Nevada | Hudbay Minerals vs. Liberty Gold Corp | Hudbay Minerals vs. GoldMining | Hudbay Minerals vs. International Tower Hill |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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