Correlation Between Delta Air and Hecla Mining
Can any of the company-specific risk be diversified away by investing in both Delta Air 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 Delta Air and Hecla Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delta Air Lines and Hecla Mining Co, you can compare the effects of market volatilities on Delta Air 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 Delta Air with a short position of Hecla Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and Hecla Mining.
Diversification Opportunities for Delta Air and Hecla Mining
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Delta and Hecla is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and Hecla Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hecla Mining and Delta Air 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 Delta Air Lines 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 Delta Air i.e., Delta Air and Hecla Mining go up and down completely randomly.
Pair Corralation between Delta Air and Hecla Mining
Assuming the 90 days trading horizon Delta Air Lines is expected to generate 0.89 times more return on investment than Hecla Mining. However, Delta Air Lines is 1.12 times less risky than Hecla Mining. It trades about 0.3 of its potential returns per unit of risk. Hecla Mining Co is currently generating about 0.17 per unit of risk. If you would invest 5,903 in Delta Air Lines on November 3, 2024 and sell it today you would earn a total of 952.00 from holding Delta Air Lines or generate 16.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delta Air Lines vs. Hecla Mining Co
Performance |
| Timeline |
| Delta Air Lines |
| Hecla Mining |
Delta Air and Hecla Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Air and Hecla Mining
The main advantage of trading using opposite Delta Air and Hecla Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air 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.| Delta Air vs. Cornish Metals | Delta Air vs. Cairo Communication SpA | Delta Air vs. Golden Metal Resources | Delta Air vs. Empire Metals Limited |
| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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