Correlation Between Hochschild Mining and CHINA CONCH

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

By analyzing existing cross correlation between Hochschild Mining plc and CHINA CH VENT, you can compare the effects of market volatilities on Hochschild Mining and CHINA CONCH 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 CHINA CONCH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochschild Mining and CHINA CONCH.

Diversification Opportunities for Hochschild Mining and CHINA CONCH

0.43

Correlation Coefficient

Hochschild Mining  CHINA CONCH

Very weak diversification

The 3 months correlation between Hochschild and CHINA is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Hochschild Mining plc and CHINA CH VENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA CH VENT 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 plc are associated (or correlated) with CHINA CONCH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA CH VENT has no effect on the direction of Hochschild Mining i.e., Hochschild Mining and CHINA CONCH go up and down completely randomly.

Pair Corralation between Hochschild Mining and CHINA CONCH

Assuming the 90 days horizon Hochschild Mining plc is expected to generate 0.74 times more return on investment than CHINA CONCH. However, Hochschild Mining plc is 1.35 times less risky than CHINA CONCH. It trades about 0.0 of its potential returns per unit of risk. CHINA CH VENT is currently generating about -0.1 per unit of risk. If you would invest  274.00  in Hochschild Mining plc on October 9, 2024 and sell it today you would lose (2.00) from holding Hochschild Mining plc or give up 0.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.12%
Values	Daily Returns

Hochschild Mining plc  vs.  CHINA CH VENT

Hochschild Mining plc

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hochschild Mining plc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Hochschild Mining reported solid returns over the last few months and may actually be approaching a breakup point.

CHINA CH VENT

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CHINA CH VENT are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, CHINA CONCH may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Hochschild Mining and CHINA CONCH

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

The idea behind Hochschild Mining plc and CHINA CH VENT 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.