Correlation Between Hochschild Mining and Chalice Mining

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

Diversification Opportunities for Hochschild Mining and Chalice Mining

-0.59

Correlation Coefficient

Hochschild Mining  Chalice Mining

Excellent diversification

The 3 months correlation between Hochschild and Chalice is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Hochschild Mining plc and Chalice Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chalice Mining 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 Chalice Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chalice Mining has no effect on the direction of Hochschild Mining i.e., Hochschild Mining and Chalice Mining go up and down completely randomly.

Pair Corralation between Hochschild Mining and Chalice Mining

Assuming the 90 days horizon Hochschild Mining is expected to generate 60.17 times less return on investment than Chalice Mining. But when comparing it to its historical volatility, Hochschild Mining plc is 1.08 times less risky than Chalice Mining. It trades about 0.0 of its potential returns per unit of risk. Chalice Mining Limited is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  60.00  in Chalice Mining Limited on April 24, 2025 and sell it today you would earn a total of  44.00  from holding Chalice Mining Limited or generate 73.33% return on investment over 90 days.

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

Hochschild Mining plc  vs.  Chalice Mining Limited

Hochschild Mining plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hochschild Mining plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Hochschild Mining is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Chalice Mining

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Chalice Mining Limited are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Chalice Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hochschild Mining and Chalice Mining

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

The idea behind Hochschild Mining plc and Chalice Mining Limited 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.