Correlation Between Host Hotels and Hecla Mining
Can any of the company-specific risk be diversified away by investing in both Host Hotels and Hecla 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 Host Hotels and Hecla Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Host Hotels Resorts and Hecla Mining Co, you can compare the effects of market volatilities on Host Hotels and Hecla 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 Host Hotels with a short position of Hecla Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Host Hotels and Hecla Mining.
Diversification Opportunities for Host Hotels and Hecla Mining
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Host and Hecla is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Host Hotels Resorts and Hecla Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hecla Mining and Host Hotels 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 Host Hotels Resorts are associated (or correlated) with Hecla Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hecla Mining has no effect on the direction of Host Hotels i.e., Host Hotels and Hecla Mining go up and down completely randomly.
Pair Corralation between Host Hotels and Hecla Mining
Assuming the 90 days trading horizon Host Hotels Resorts is expected to under-perform the Hecla Mining. But the stock apears to be less risky and, when comparing its historical volatility, Host Hotels Resorts is 2.34 times less risky than Hecla Mining. The stock trades about -0.14 of its potential returns per unit of risk. The Hecla Mining Co is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 524.00 in Hecla Mining Co on November 3, 2024 and sell it today you would earn a total of 50.00 from holding Hecla Mining Co or generate 9.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Host Hotels Resorts vs. Hecla Mining Co
Performance |
| Timeline |
| Host Hotels Resorts |
| Hecla Mining |
Host Hotels and Hecla Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Host Hotels and Hecla Mining
The main advantage of trading using opposite Host Hotels and Hecla Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Host Hotels position performs unexpectedly, Hecla 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 Hecla Mining will offset losses from the drop in Hecla Mining's long position.| Host Hotels vs. Erste Group Bank | Host Hotels vs. Moneta Money Bank | Host Hotels vs. Take Two Interactive Software | Host Hotels vs. Software Circle plc |
| Hecla Mining vs. Symphony Environmental Technologies | Hecla Mining vs. Pan American Silver | Hecla Mining vs. Baker Steel Resources | Hecla Mining vs. Endeavour Mining Corp |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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