Correlation Between HOCHSCHILD MINING and Adobe

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

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

Diversification Opportunities for HOCHSCHILD MINING and Adobe

0.27

Correlation Coefficient

HOCHSCHILD MINING  Adobe

Modest diversification

The 3 months correlation between HOCHSCHILD and Adobe is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding HOCHSCHILD MINING and Adobe Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adobe Inc and HOCHSCHILD MINING 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 HOCHSCHILD MINING are associated (or correlated) with Adobe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adobe Inc has no effect on the direction of HOCHSCHILD MINING i.e., HOCHSCHILD MINING and Adobe go up and down completely randomly.

Pair Corralation between HOCHSCHILD MINING and Adobe

Assuming the 90 days trading horizon HOCHSCHILD MINING is expected to generate 1.43 times more return on investment than Adobe. However, HOCHSCHILD MINING is 1.43 times more volatile than Adobe Inc. It trades about 0.11 of its potential returns per unit of risk. Adobe Inc is currently generating about -0.07 per unit of risk. If you would invest  215.00  in HOCHSCHILD MINING on October 10, 2024 and sell it today you would earn a total of  48.00  from holding HOCHSCHILD MINING or generate 22.33% return on investment over 90 days.

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

HOCHSCHILD MINING  vs.  Adobe Inc

HOCHSCHILD MINING

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HOCHSCHILD MINING are ranked lower than 8 (%) 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.

Adobe Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adobe Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's fundamental drivers remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with HOCHSCHILD MINING and Adobe

The main advantage of trading using opposite HOCHSCHILD MINING and Adobe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HOCHSCHILD MINING position performs unexpectedly, Adobe 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 Adobe will offset losses from the drop in Adobe's long position.

The idea behind HOCHSCHILD MINING and Adobe Inc 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.

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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.