Correlation Between Hycroft Mining and Compania Mina

By analyzing existing cross correlation between Hycroft Mining Holding and Compania Mina Buenaventura, you can compare the effects of market volatilities on Hycroft Mining and Compania Mina 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 Hycroft Mining with a short position of Compania Mina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hycroft Mining and Compania Mina.

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Can any of the company-specific risk be diversified away by investing in both Hycroft Mining and Compania Mina 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 Hycroft Mining and Compania Mina into the same portfolio, which is an essential part of the fundamental portfolio management process.

Diversification Opportunities for Hycroft Mining and Compania Mina

0.38
  Correlation Coefficient
Hycroft Mining Holding
Compania Mina Buenav

Weak diversification

The 3 months correlation between Hycroft and Compania is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Hycroft Mining Holding and Compania Mina Buenaventura in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Compania Mina Buenav and Hycroft 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 Hycroft Mining Holding are associated (or correlated) with Compania Mina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compania Mina Buenav has no effect on the direction of Hycroft Mining i.e., Hycroft Mining and Compania Mina go up and down completely randomly.

Pair Corralation between Hycroft Mining and Compania Mina

Given the investment horizon of 90 days Hycroft Mining Holding is expected to under-perform the Compania Mina. In addition to that, Hycroft Mining is 3.49 times more volatile than Compania Mina Buenaventura. It trades about -0.31 of its total potential returns per unit of risk. Compania Mina Buenaventura is currently generating about -0.18 per unit of volatility. If you would invest  784.00  in Compania Mina Buenaventura on September 1, 2021 and sell it today you would lose (86.00)  from holding Compania Mina Buenaventura or give up 10.97% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Hycroft Mining Holding  vs.  Compania Mina Buenaventura

 Performance (%) 
      Timeline 
Hycroft Mining Holding 
Hycroft Performance
0 of 100
Over the last 90 days Hycroft Mining Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's primary indicators remain somewhat strong which may send shares a bit higher in December 2021. The current disturbance may also be a sign of long term up-swing for the company investors.

Hycroft Price Channel

Compania Mina Buenav 
Compania Performance
0 of 100
Over the last 90 days Compania Mina Buenaventura has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Compania Mina is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Compania Price Channel

Hycroft Mining and Compania Mina Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Hycroft Mining and Compania Mina

The main advantage of trading using opposite Hycroft Mining and Compania Mina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hycroft Mining position performs unexpectedly, Compania Mina 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 Compania Mina will offset losses from the drop in Compania Mina's long position.
The idea behind Hycroft Mining Holding and Compania Mina Buenaventura 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.
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.

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