Correlation Between Creo Medical and Hochschild Mining

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

By analyzing existing cross correlation between Creo Medical Group and Hochschild Mining plc, you can compare the effects of market volatilities on Creo Medical 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 Creo Medical with a short position of Hochschild Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Creo Medical and Hochschild Mining.

Diversification Opportunities for Creo Medical and Hochschild Mining

0.01

Correlation Coefficient

Creo Medical  Hochschild Mining

Significant diversification

The 3 months correlation between Creo and Hochschild is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Creo Medical Group 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 Creo Medical 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 Creo Medical Group 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 Creo Medical i.e., Creo Medical and Hochschild Mining go up and down completely randomly.

Pair Corralation between Creo Medical and Hochschild Mining

Assuming the 90 days trading horizon Creo Medical Group is expected to under-perform the Hochschild Mining. In addition to that, Creo Medical is 1.07 times more volatile than Hochschild Mining plc. It trades about -0.34 of its total potential returns per unit of risk. Hochschild Mining plc is currently generating about 0.09 per unit of volatility. If you would invest  17,540  in Hochschild Mining plc on December 5, 2024 and sell it today you would earn a total of  860.00  from holding Hochschild Mining plc or generate 4.9% return on investment over 90 days.

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

Creo Medical Group  vs.  Hochschild Mining plc

Creo Medical Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Creo Medical Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Creo Medical is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Hochschild Mining plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hochschild Mining plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Creo Medical and Hochschild Mining

The main advantage of trading using opposite Creo Medical and Hochschild Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Creo Medical 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 Creo Medical Group and Hochschild Mining plc 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.