Correlation Between CRRC and HOCHSCHILD MINING

Can any of the company-specific risk be diversified away by investing in both CRRC 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 CRRC and HOCHSCHILD MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CRRC Limited and HOCHSCHILD MINING, you can compare the effects of market volatilities on CRRC 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 CRRC with a short position of HOCHSCHILD MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of CRRC and HOCHSCHILD MINING.

Diversification Opportunities for CRRC and HOCHSCHILD MINING

-0.14

Correlation Coefficient

CRRC  HOCHSCHILD MINING

Good diversification

The 3 months correlation between CRRC and HOCHSCHILD is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding CRRC Limited and HOCHSCHILD MINING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HOCHSCHILD MINING and CRRC 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 CRRC Limited 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 has no effect on the direction of CRRC i.e., CRRC and HOCHSCHILD MINING go up and down completely randomly.

Pair Corralation between CRRC and HOCHSCHILD MINING

Assuming the 90 days horizon CRRC Limited is expected to generate 1.24 times more return on investment than HOCHSCHILD MINING. However, CRRC is 1.24 times more volatile than HOCHSCHILD MINING. It trades about 0.08 of its potential returns per unit of risk. HOCHSCHILD MINING is currently generating about 0.08 per unit of risk. If you would invest  15.00  in CRRC Limited on October 11, 2024 and sell it today you would earn a total of  46.00  from holding CRRC Limited or generate 306.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CRRC Limited  vs.  HOCHSCHILD MINING

CRRC Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CRRC Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, CRRC is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

HOCHSCHILD MINING

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in HOCHSCHILD MINING are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile primary indicators, HOCHSCHILD MINING exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CRRC and HOCHSCHILD MINING

The main advantage of trading using opposite CRRC and HOCHSCHILD MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CRRC 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.

The idea behind CRRC Limited and HOCHSCHILD MINING pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.