Correlation Between Hochschild Mining and Nucor

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

Diversification Opportunities for Hochschild Mining and Nucor

-0.39

Correlation Coefficient

Hochschild Mining  Nucor

Very good diversification

The 3 months correlation between Hochschild and Nucor is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Hochschild Mining plc and Nucor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nucor 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 Nucor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nucor has no effect on the direction of Hochschild Mining i.e., Hochschild Mining and Nucor go up and down completely randomly.

Pair Corralation between Hochschild Mining and Nucor

Assuming the 90 days horizon Hochschild Mining is expected to generate 23.33 times less return on investment than Nucor. In addition to that, Hochschild Mining is 1.66 times more volatile than Nucor. It trades about 0.0 of its total potential returns per unit of risk. Nucor is currently generating about 0.15 per unit of volatility. If you would invest  9,661  in Nucor on April 24, 2025 and sell it today you would earn a total of  2,359  from holding Nucor or generate 24.42% return on investment over 90 days.

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

Hochschild Mining plc  vs.  Nucor

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.

Nucor

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nucor are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Nucor reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hochschild Mining and Nucor

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

The idea behind Hochschild Mining plc and Nucor 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.