Correlation Between Warpaint London and Hochschild Mining
Can any of the company-specific risk be diversified away by investing in both Warpaint London 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 Warpaint London and Hochschild Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Warpaint London PLC and Hochschild Mining plc, you can compare the effects of market volatilities on Warpaint London 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 Warpaint London with a short position of Hochschild Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Warpaint London and Hochschild Mining.
Diversification Opportunities for Warpaint London and Hochschild Mining
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Warpaint and Hochschild is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Warpaint London PLC 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 Warpaint London 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 Warpaint London PLC 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 Warpaint London i.e., Warpaint London and Hochschild Mining go up and down completely randomly.
Pair Corralation between Warpaint London and Hochschild Mining
Assuming the 90 days trading horizon Warpaint London PLC is expected to generate 0.87 times more return on investment than Hochschild Mining. However, Warpaint London PLC is 1.14 times less risky than Hochschild Mining. It trades about 0.07 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 50,963 in Warpaint London PLC on September 4, 2024 and sell it today you would earn a total of 1,637 from holding Warpaint London PLC or generate 3.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Warpaint London PLC vs. Hochschild Mining plc
Performance |
| Timeline |
| Warpaint London PLC |
| Hochschild Mining plc |
Warpaint London and Hochschild Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Warpaint London and Hochschild Mining
The main advantage of trading using opposite Warpaint London and Hochschild Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Warpaint London 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.| Warpaint London vs. Hochschild Mining plc | Warpaint London vs. GoldMining | Warpaint London vs. Neometals | Warpaint London vs. SilverCrest Metals |
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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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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