Correlation Between Ternium SA and Hycroft Mining
Can any of the company-specific risk be diversified away by investing in both Ternium SA and Hycroft 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 Ternium SA and Hycroft Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ternium SA ADR and Hycroft Mining Holding, you can compare the effects of market volatilities on Ternium SA and Hycroft 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 Ternium SA with a short position of Hycroft Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ternium SA and Hycroft Mining.
Diversification Opportunities for Ternium SA and Hycroft Mining
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ternium and Hycroft is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Ternium SA ADR and Hycroft Mining Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hycroft Mining Holding and Ternium SA 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 Ternium SA ADR are associated (or correlated) with Hycroft Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hycroft Mining Holding has no effect on the direction of Ternium SA i.e., Ternium SA and Hycroft Mining go up and down completely randomly.
Pair Corralation between Ternium SA and Hycroft Mining
Allowing for the 90-day total investment horizon Ternium SA ADR is expected to under-perform the Hycroft Mining. But the stock apears to be less risky and, when comparing its historical volatility, Ternium SA ADR is 10.81 times less risky than Hycroft Mining. The stock trades about -0.02 of its potential returns per unit of risk. The Hycroft Mining Holding is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1.50 in Hycroft Mining Holding on October 20, 2024 and sell it today you would earn a total of 0.10 from holding Hycroft Mining Holding or generate 6.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
Ternium SA ADR vs. Hycroft Mining Holding
Performance |
| Timeline |
| Ternium SA ADR |
| Hycroft Mining Holding |
Ternium SA and Hycroft Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ternium SA and Hycroft Mining
The main advantage of trading using opposite Ternium SA and Hycroft Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ternium SA position performs unexpectedly, Hycroft 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 Hycroft Mining will offset losses from the drop in Hycroft Mining's long position.| Ternium SA vs. United States Steel | Ternium SA vs. First Majestic Silver | Ternium SA vs. AngloGold Ashanti plc | Ternium SA vs. Celanese |
| Hycroft Mining vs. Hycroft Mining Holding | Hycroft Mining vs. Hycroft Mining Holding | Hycroft Mining vs. HighPeak Energy | Hycroft Mining vs. Lixte Biotechnology Holdings |
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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