Correlation Between HOCHSCHILD MINING and Tokyu Construction

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

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

Diversification Opportunities for HOCHSCHILD MINING and Tokyu Construction

-0.24

Correlation Coefficient

HOCHSCHILD MINING  Tokyu Construction

Very good diversification

The 3 months correlation between HOCHSCHILD and Tokyu is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding HOCHSCHILD MINING and Tokyu Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tokyu Construction 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 Tokyu Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tokyu Construction has no effect on the direction of HOCHSCHILD MINING i.e., HOCHSCHILD MINING and Tokyu Construction go up and down completely randomly.

Pair Corralation between HOCHSCHILD MINING and Tokyu Construction

Assuming the 90 days trading horizon HOCHSCHILD MINING is expected to generate 2.24 times more return on investment than Tokyu Construction. However, HOCHSCHILD MINING is 2.24 times more volatile than Tokyu Construction Co. It trades about 0.14 of its potential returns per unit of risk. Tokyu Construction Co is currently generating about -0.03 per unit of risk. If you would invest  107.00  in HOCHSCHILD MINING on October 22, 2024 and sell it today you would earn a total of  153.00  from holding HOCHSCHILD MINING or generate 142.99% 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.  Tokyu Construction Co

HOCHSCHILD MINING

Risk-Adjusted Performance

0 of 100

Very Weak

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

Tokyu Construction

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tokyu Construction Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Tokyu Construction is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with HOCHSCHILD MINING and Tokyu Construction

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

The idea behind HOCHSCHILD MINING and Tokyu Construction Co 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.