Correlation Between Hochschild Mining and SANTANDER

Can any of the company-specific risk be diversified away by investing in both Hochschild Mining and SANTANDER 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 SANTANDER 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 SANTANDER UK 8, you can compare the effects of market volatilities on Hochschild Mining and SANTANDER 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 SANTANDER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochschild Mining and SANTANDER.

Diversification Opportunities for Hochschild Mining and SANTANDER

0.48

Correlation Coefficient

Hochschild Mining  SANTANDER

Very weak diversification

The 3 months correlation between Hochschild and SANTANDER is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Hochschild Mining plc and SANTANDER UK 8 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SANTANDER UK 8 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 SANTANDER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SANTANDER UK 8 has no effect on the direction of Hochschild Mining i.e., Hochschild Mining and SANTANDER go up and down completely randomly.

Pair Corralation between Hochschild Mining and SANTANDER

Assuming the 90 days trading horizon Hochschild Mining plc is expected to under-perform the SANTANDER. In addition to that, Hochschild Mining is 12.89 times more volatile than SANTANDER UK 8. It trades about -0.1 of its total potential returns per unit of risk. SANTANDER UK 8 is currently generating about -0.08 per unit of volatility. If you would invest  13,600  in SANTANDER UK 8 on September 1, 2024 and sell it today you would lose (50.00) from holding SANTANDER UK 8 or give up 0.37% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Hochschild Mining plc  vs.  SANTANDER UK 8

Hochschild Mining plc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hochschild Mining plc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Hochschild Mining exhibited solid returns over the last few months and may actually be approaching a breakup point.

SANTANDER UK 8

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SANTANDER UK 8 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, SANTANDER is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Hochschild Mining and SANTANDER

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

The idea behind Hochschild Mining plc and SANTANDER UK 8 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.