Correlation Between FLOW TRADERS and Hochschild Mining
Can any of the company-specific risk be diversified away by investing in both FLOW TRADERS 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 FLOW TRADERS and Hochschild Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FLOW TRADERS LTD and Hochschild Mining plc, you can compare the effects of market volatilities on FLOW TRADERS 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 FLOW TRADERS with a short position of Hochschild Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of FLOW TRADERS and Hochschild Mining.
Diversification Opportunities for FLOW TRADERS and Hochschild Mining
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between FLOW and Hochschild is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding FLOW TRADERS LTD 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 FLOW TRADERS 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 FLOW TRADERS LTD 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 FLOW TRADERS i.e., FLOW TRADERS and Hochschild Mining go up and down completely randomly.
Pair Corralation between FLOW TRADERS and Hochschild Mining
Assuming the 90 days horizon FLOW TRADERS LTD is expected to generate 0.58 times more return on investment than Hochschild Mining. However, FLOW TRADERS LTD is 1.72 times less risky than Hochschild Mining. It trades about 0.18 of its potential returns per unit of risk. Hochschild Mining plc is currently generating about 0.1 per unit of risk. If you would invest 2,144 in FLOW TRADERS LTD on December 28, 2024 and sell it today you would earn a total of 584.00 from holding FLOW TRADERS LTD or generate 27.24% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
FLOW TRADERS LTD vs. Hochschild Mining plc
Performance |
Timeline |
FLOW TRADERS LTD |
Hochschild Mining plc |
FLOW TRADERS and Hochschild Mining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FLOW TRADERS and Hochschild Mining
The main advantage of trading using opposite FLOW TRADERS and Hochschild Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FLOW TRADERS 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.FLOW TRADERS vs. Morgan Stanley | FLOW TRADERS vs. Morgan Stanley | FLOW TRADERS vs. The Charles Schwab | FLOW TRADERS vs. The Goldman Sachs |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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