Correlation Between Hochschild Mining and SupplyMe Capital

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

Diversification Opportunities for Hochschild Mining and SupplyMe Capital

-0.73

Correlation Coefficient

Hochschild Mining  SupplyMe Capital

Pay attention - limited upside

The 3 months correlation between Hochschild and SupplyMe is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Hochschild Mining plc and SupplyMe Capital PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SupplyMe Capital PLC 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 SupplyMe Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SupplyMe Capital PLC has no effect on the direction of Hochschild Mining i.e., Hochschild Mining and SupplyMe Capital go up and down completely randomly.

Pair Corralation between Hochschild Mining and SupplyMe Capital

Assuming the 90 days trading horizon Hochschild Mining plc is expected to generate 0.3 times more return on investment than SupplyMe Capital. However, Hochschild Mining plc is 3.39 times less risky than SupplyMe Capital. It trades about 0.1 of its potential returns per unit of risk. SupplyMe Capital PLC is currently generating about -0.05 per unit of risk. If you would invest  17,460  in Hochschild Mining plc on September 13, 2024 and sell it today you would earn a total of  6,440  from holding Hochschild Mining plc or generate 36.88% return on investment over 90 days.

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

Hochschild Mining plc  vs.  SupplyMe Capital PLC

Hochschild Mining plc

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hochschild Mining plc are ranked lower than 12 (%) 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.

SupplyMe Capital PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SupplyMe Capital PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Hochschild Mining and SupplyMe Capital

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

The idea behind Hochschild Mining plc and SupplyMe Capital 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.

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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.