Correlation Between GSTechnologies and Hochschild Mining

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

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

Diversification Opportunities for GSTechnologies and Hochschild Mining

-0.53

Correlation Coefficient

GSTechnologies  Hochschild Mining

Excellent diversification

The 3 months correlation between GSTechnologies and Hochschild is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding GSTechnologies 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 GSTechnologies 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 GSTechnologies 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 GSTechnologies i.e., GSTechnologies and Hochschild Mining go up and down completely randomly.

Pair Corralation between GSTechnologies and Hochschild Mining

Assuming the 90 days trading horizon GSTechnologies is expected to generate 2.63 times more return on investment than Hochschild Mining. However, GSTechnologies is 2.63 times more volatile than Hochschild Mining plc. It trades about 0.36 of its potential returns per unit of risk. Hochschild Mining plc is currently generating about 0.1 per unit of risk. If you would invest  65.00  in GSTechnologies on October 10, 2024 and sell it today you would earn a total of  230.00  from holding GSTechnologies or generate 353.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

GSTechnologies  vs.  Hochschild Mining plc

GSTechnologies

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in GSTechnologies are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, GSTechnologies exhibited solid returns over the last few months and may actually be approaching a breakup point.

Hochschild Mining plc

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hochschild Mining plc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Hochschild Mining exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GSTechnologies and Hochschild Mining

The main advantage of trading using opposite GSTechnologies and Hochschild Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GSTechnologies 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 GSTechnologies 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 Transaction History module to view history of all your transactions and understand their impact on performance.