Correlation Between Hochschild Mining and Home Depot
Can any of the company-specific risk be diversified away by investing in both Hochschild Mining and Home Depot 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 Home Depot 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 Home Depot, you can compare the effects of market volatilities on Hochschild Mining and Home Depot 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 Home Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochschild Mining and Home Depot.
Diversification Opportunities for Hochschild Mining and Home Depot
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hochschild and Home is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Hochschild Mining plc and Home Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Depot 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 Home Depot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Depot has no effect on the direction of Hochschild Mining i.e., Hochschild Mining and Home Depot go up and down completely randomly.
Pair Corralation between Hochschild Mining and Home Depot
If you would invest 21,300 in Hochschild Mining plc on October 23, 2024 and sell it today you would earn a total of 750.00 from holding Hochschild Mining plc or generate 3.52% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Hochschild Mining plc vs. Home Depot
Performance |
Timeline |
Hochschild Mining plc |
Home Depot |
Hochschild Mining and Home Depot Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hochschild Mining and Home Depot
The main advantage of trading using opposite Hochschild Mining and Home Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochschild Mining position performs unexpectedly, Home Depot 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 Home Depot will offset losses from the drop in Home Depot's long position.Hochschild Mining vs. Givaudan SA | Hochschild Mining vs. Antofagasta PLC | Hochschild Mining vs. Ferrexpo PLC | Hochschild Mining vs. Atalaya Mining |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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