Correlation Between Hochschild Mining and Wayside Technology

Can any of the company-specific risk be diversified away by investing in both Hochschild Mining and Wayside Technology 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 Wayside Technology 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 Wayside Technology Group, you can compare the effects of market volatilities on Hochschild Mining and Wayside Technology 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 Wayside Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochschild Mining and Wayside Technology.

Diversification Opportunities for Hochschild Mining and Wayside Technology

0.31

Correlation Coefficient

Hochschild Mining  Wayside Technology

Weak diversification

The 3 months correlation between Hochschild and Wayside is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Hochschild Mining plc and Wayside Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wayside Technology 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 Wayside Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wayside Technology has no effect on the direction of Hochschild Mining i.e., Hochschild Mining and Wayside Technology go up and down completely randomly.

Pair Corralation between Hochschild Mining and Wayside Technology

Assuming the 90 days horizon Hochschild Mining plc is expected to generate 1.71 times more return on investment than Wayside Technology. However, Hochschild Mining is 1.71 times more volatile than Wayside Technology Group. It trades about 0.1 of its potential returns per unit of risk. Wayside Technology Group is currently generating about -0.04 per unit of risk. If you would invest  210.00  in Hochschild Mining plc on December 4, 2024 and sell it today you would earn a total of  11.00  from holding Hochschild Mining plc or generate 5.24% 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 plc  vs.  Wayside Technology Group

Hochschild Mining plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hochschild Mining plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Wayside Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wayside Technology Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Hochschild Mining and Wayside Technology

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

The idea behind Hochschild Mining plc and Wayside Technology Group 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.