Correlation Between Mingteng International and Hochschild Mining

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

By analyzing existing cross correlation between Mingteng International and Hochschild Mining PLC, you can compare the effects of market volatilities on Mingteng International and Hochschild Mining 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 Mingteng International with a short position of Hochschild Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mingteng International and Hochschild Mining.

Diversification Opportunities for Mingteng International and Hochschild Mining

0.45

Correlation Coefficient

Mingteng International  Hochschild Mining

Very weak diversification

The 3 months correlation between Mingteng and Hochschild is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Mingteng International and Hochschild Mining PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hochschild Mining PLC and Mingteng International 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 Mingteng International are associated (or correlated) with Hochschild Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hochschild Mining PLC has no effect on the direction of Mingteng International i.e., Mingteng International and Hochschild Mining go up and down completely randomly.

Pair Corralation between Mingteng International and Hochschild Mining

Given the investment horizon of 90 days Mingteng International is expected to generate 1.68 times more return on investment than Hochschild Mining. However, Mingteng International is 1.68 times more volatile than Hochschild Mining PLC. It trades about 0.07 of its potential returns per unit of risk. Hochschild Mining PLC is currently generating about 0.07 per unit of risk. If you would invest  350.00  in Mingteng International on October 10, 2024 and sell it today you would earn a total of  215.00  from holding Mingteng International or generate 61.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	36.77%
Values	Daily Returns

Mingteng International  vs.  Hochschild Mining PLC

Mingteng International

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mingteng International are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile technical and fundamental indicators, Mingteng International displayed solid returns over the last few months and may actually be approaching a breakup point.

Hochschild Mining PLC

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hochschild Mining PLC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Hochschild Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mingteng International and Hochschild Mining

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

The idea behind Mingteng International and Hochschild Mining PLC 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.