Correlation Between HOCHSCHILD MINING and Realord Group

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

By analyzing existing cross correlation between HOCHSCHILD MINING and Realord Group Holdings, you can compare the effects of market volatilities on HOCHSCHILD MINING and Realord Group 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 Realord Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of HOCHSCHILD MINING and Realord Group.

Diversification Opportunities for HOCHSCHILD MINING and Realord Group

-0.06

Correlation Coefficient

HOCHSCHILD MINING  Realord Group

Good diversification

The 3 months correlation between HOCHSCHILD and Realord is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding HOCHSCHILD MINING and Realord Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Realord Group Holdings 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 Realord Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Realord Group Holdings has no effect on the direction of HOCHSCHILD MINING i.e., HOCHSCHILD MINING and Realord Group go up and down completely randomly.

Pair Corralation between HOCHSCHILD MINING and Realord Group

Assuming the 90 days trading horizon HOCHSCHILD MINING is expected to generate 2.94 times more return on investment than Realord Group. However, HOCHSCHILD MINING is 2.94 times more volatile than Realord Group Holdings. It trades about 0.1 of its potential returns per unit of risk. Realord Group Holdings is currently generating about -0.02 per unit of risk. If you would invest  254.00  in HOCHSCHILD MINING on December 23, 2024 and sell it today you would earn a total of  56.00  from holding HOCHSCHILD MINING or generate 22.05% return on investment over 90 days.

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

HOCHSCHILD MINING  vs.  Realord Group Holdings

HOCHSCHILD MINING

Risk-Adjusted Performance

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.

Realord Group Holdings

Risk-Adjusted Performance

Very Weak

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

Pair Trading with HOCHSCHILD MINING and Realord Group

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

The idea behind HOCHSCHILD MINING and Realord Group Holdings 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.