Correlation Between ScanSource and Hochschild Mining
Can any of the company-specific risk be diversified away by investing in both ScanSource 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 ScanSource and Hochschild Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ScanSource and Hochschild Mining plc, you can compare the effects of market volatilities on ScanSource 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 ScanSource with a short position of Hochschild Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of ScanSource and Hochschild Mining.
Diversification Opportunities for ScanSource and Hochschild Mining
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ScanSource and Hochschild is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding ScanSource 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 ScanSource 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 ScanSource 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 ScanSource i.e., ScanSource and Hochschild Mining go up and down completely randomly.
Pair Corralation between ScanSource and Hochschild Mining
Assuming the 90 days horizon ScanSource is expected to generate 1.25 times less return on investment than Hochschild Mining. But when comparing it to its historical volatility, ScanSource is 1.41 times less risky than Hochschild Mining. It trades about 0.08 of its potential returns per unit of risk. Hochschild Mining plc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 223.00 in Hochschild Mining plc on September 25, 2024 and sell it today you would earn a total of 30.00 from holding Hochschild Mining plc or generate 13.45% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
ScanSource vs. Hochschild Mining plc
Performance |
Timeline |
ScanSource |
Hochschild Mining plc |
ScanSource and Hochschild Mining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ScanSource and Hochschild Mining
The main advantage of trading using opposite ScanSource and Hochschild Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ScanSource 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.ScanSource vs. MULTI CHEM LTD | ScanSource vs. LEGAL GENERAL | ScanSource vs. SPORTING | ScanSource vs. US FOODS HOLDING |
Hochschild Mining vs. ScanSource | Hochschild Mining vs. BOSTON BEER A | Hochschild Mining vs. SIDETRADE EO 1 | Hochschild Mining vs. National Beverage Corp |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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