Correlation Between Rio Tinto and Hudbay Minerals
Can any of the company-specific risk be diversified away by investing in both Rio Tinto and Hudbay Minerals 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 Rio Tinto and Hudbay Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rio Tinto ADR and Hudbay Minerals, you can compare the effects of market volatilities on Rio Tinto and Hudbay Minerals 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 Rio Tinto with a short position of Hudbay Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rio Tinto and Hudbay Minerals.
Diversification Opportunities for Rio Tinto and Hudbay Minerals
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Rio and Hudbay is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Rio Tinto ADR and Hudbay Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudbay Minerals and Rio Tinto 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 Rio Tinto ADR are associated (or correlated) with Hudbay Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hudbay Minerals has no effect on the direction of Rio Tinto i.e., Rio Tinto and Hudbay Minerals go up and down completely randomly.
Pair Corralation between Rio Tinto and Hudbay Minerals
Considering the 90-day investment horizon Rio Tinto is expected to generate 2.81 times less return on investment than Hudbay Minerals. But when comparing it to its historical volatility, Rio Tinto ADR is 2.58 times less risky than Hudbay Minerals. It trades about 0.25 of its potential returns per unit of risk. Hudbay Minerals is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 924.00 in Hudbay Minerals on August 4, 2025 and sell it today you would earn a total of 676.00 from holding Hudbay Minerals or generate 73.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rio Tinto ADR vs. Hudbay Minerals
Performance |
| Timeline |
| Rio Tinto ADR |
| Hudbay Minerals |
Rio Tinto and Hudbay Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rio Tinto and Hudbay Minerals
The main advantage of trading using opposite Rio Tinto and Hudbay Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rio Tinto position performs unexpectedly, Hudbay Minerals 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 Hudbay Minerals will offset losses from the drop in Hudbay Minerals' long position.| Rio Tinto vs. BHP Group Limited | Rio Tinto vs. Southern Copper | Rio Tinto vs. Newmont Goldcorp Corp | Rio Tinto vs. Vale SA ADR |
| Hudbay Minerals vs. Louisiana Pacific | Hudbay Minerals vs. Gerdau SA ADR | Hudbay Minerals vs. Compania de Minas | Hudbay Minerals vs. Triple Flag Precious |
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 CEOs Directory module to screen CEOs from public companies around the world.
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