Correlation Between Hochschild Mining and PT Bank
Can any of the company-specific risk be diversified away by investing in both Hochschild Mining and PT Bank 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 PT Bank 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 PT Bank Central, you can compare the effects of market volatilities on Hochschild Mining and PT Bank 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 PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochschild Mining and PT Bank.
Diversification Opportunities for Hochschild Mining and PT Bank
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hochschild and BZG2 is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Hochschild Mining plc and PT Bank Central in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Central 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 PT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bank Central has no effect on the direction of Hochschild Mining i.e., Hochschild Mining and PT Bank go up and down completely randomly.
Pair Corralation between Hochschild Mining and PT Bank
Assuming the 90 days horizon Hochschild Mining plc is expected to generate 0.76 times more return on investment than PT Bank. However, Hochschild Mining plc is 1.32 times less risky than PT Bank. It trades about 0.06 of its potential returns per unit of risk. PT Bank Central is currently generating about 0.01 per unit of risk. If you would invest 249.00 in Hochschild Mining plc on October 15, 2024 and sell it today you would earn a total of 20.00 from holding Hochschild Mining plc or generate 8.03% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Hochschild Mining plc vs. PT Bank Central
Performance |
Timeline |
Hochschild Mining plc |
PT Bank Central |
Hochschild Mining and PT Bank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hochschild Mining and PT Bank
The main advantage of trading using opposite Hochschild Mining and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochschild Mining position performs unexpectedly, PT Bank 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 PT Bank will offset losses from the drop in PT Bank's long position.Hochschild Mining vs. Taiwan Semiconductor Manufacturing | ||
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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