Correlation Between IShares MSCI and Hochschild Mining
Can any of the company-specific risk be diversified away by investing in both IShares MSCI 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 IShares MSCI and Hochschild Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI Ireland and Hochschild Mining PLC, you can compare the effects of market volatilities on IShares MSCI 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 IShares MSCI with a short position of Hochschild Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and Hochschild Mining.
Diversification Opportunities for IShares MSCI and Hochschild Mining
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and Hochschild is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI Ireland 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 IShares MSCI 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 iShares MSCI Ireland 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 IShares MSCI i.e., IShares MSCI and Hochschild Mining go up and down completely randomly.
Pair Corralation between IShares MSCI and Hochschild Mining
Given the investment horizon of 90 days iShares MSCI Ireland is expected to under-perform the Hochschild Mining. But the etf apears to be less risky and, when comparing its historical volatility, iShares MSCI Ireland is 4.65 times less risky than Hochschild Mining. The etf trades about -0.25 of its potential returns per unit of risk. The Hochschild Mining PLC is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 142.00 in Hochschild Mining PLC on January 20, 2024 and sell it today you would earn a total of 45.00 from holding Hochschild Mining PLC or generate 31.69% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
iShares MSCI Ireland vs. Hochschild Mining PLC
Performance |
Timeline |
iShares MSCI Ireland |
Hochschild Mining PLC |
IShares MSCI and Hochschild Mining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IShares MSCI and Hochschild Mining
The main advantage of trading using opposite IShares MSCI and Hochschild Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI 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.IShares MSCI vs. iShares MSCI New | IShares MSCI vs. iShares MSCI Finland | IShares MSCI vs. iShares MSCI Israel | IShares MSCI vs. iShares MSCI Poland |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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