Correlation Between Perma-Fix Environmental and HOCHSCHILD MINING

Can any of the company-specific risk be diversified away by investing in both Perma-Fix Environmental 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 Perma-Fix Environmental and HOCHSCHILD MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Perma Fix Environmental Services and HOCHSCHILD MINING, you can compare the effects of market volatilities on Perma-Fix Environmental 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 Perma-Fix Environmental with a short position of HOCHSCHILD MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perma-Fix Environmental and HOCHSCHILD MINING.

Diversification Opportunities for Perma-Fix Environmental and HOCHSCHILD MINING

0.63

Correlation Coefficient

Perma-Fix Environmental  HOCHSCHILD MINING

Poor diversification

The 3 months correlation between Perma-Fix and HOCHSCHILD is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Perma Fix Environmental Servic and HOCHSCHILD MINING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HOCHSCHILD MINING and Perma-Fix Environmental 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 Perma Fix Environmental Services 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 has no effect on the direction of Perma-Fix Environmental i.e., Perma-Fix Environmental and HOCHSCHILD MINING go up and down completely randomly.

Pair Corralation between Perma-Fix Environmental and HOCHSCHILD MINING

Assuming the 90 days trading horizon Perma Fix Environmental Services is expected to under-perform the HOCHSCHILD MINING. In addition to that, Perma-Fix Environmental is 1.3 times more volatile than HOCHSCHILD MINING. It trades about -0.16 of its total potential returns per unit of risk. HOCHSCHILD MINING is currently generating about -0.03 per unit of volatility. If you would invest  269.00  in HOCHSCHILD MINING on September 21, 2024 and sell it today you would lose (9.00) from holding HOCHSCHILD MINING or give up 3.35% of portfolio value over 90 days.

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

Perma Fix Environmental Servic  vs.  HOCHSCHILD MINING

Perma Fix Environmental

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Perma Fix Environmental Services are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Perma-Fix Environmental may actually be approaching a critical reversion point that can send shares even higher in January 2025.

HOCHSCHILD MINING

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HOCHSCHILD MINING are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady primary indicators, HOCHSCHILD MINING exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Perma-Fix Environmental and HOCHSCHILD MINING

The main advantage of trading using opposite Perma-Fix Environmental and HOCHSCHILD MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perma-Fix Environmental 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 Perma Fix Environmental Services and HOCHSCHILD MINING 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.