Correlation Between Hecla Mining and SMA Solar
Can any of the company-specific risk be diversified away by investing in both Hecla Mining and SMA Solar 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 Hecla Mining and SMA Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hecla Mining Co and SMA Solar Technology, you can compare the effects of market volatilities on Hecla Mining and SMA Solar 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 Hecla Mining with a short position of SMA Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hecla Mining and SMA Solar.
Diversification Opportunities for Hecla Mining and SMA Solar
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hecla and SMA is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Hecla Mining Co and SMA Solar Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SMA Solar Technology and Hecla 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 Hecla Mining Co are associated (or correlated) with SMA Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SMA Solar Technology has no effect on the direction of Hecla Mining i.e., Hecla Mining and SMA Solar go up and down completely randomly.
Pair Corralation between Hecla Mining and SMA Solar
Assuming the 90 days trading horizon Hecla Mining Co is expected to generate 1.08 times more return on investment than SMA Solar. However, Hecla Mining is 1.08 times more volatile than SMA Solar Technology. It trades about 0.01 of its potential returns per unit of risk. SMA Solar Technology is currently generating about -0.07 per unit of risk. If you would invest 626.00 in Hecla Mining Co on October 13, 2024 and sell it today you would lose (91.00) from holding Hecla Mining Co or give up 14.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Hecla Mining Co vs. SMA Solar Technology
Performance |
| Timeline |
| Hecla Mining |
| SMA Solar Technology |
Hecla Mining and SMA Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hecla Mining and SMA Solar
The main advantage of trading using opposite Hecla Mining and SMA Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hecla Mining position performs unexpectedly, SMA Solar 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 SMA Solar will offset losses from the drop in SMA Solar's long position.| Hecla Mining vs. Walmart | Hecla Mining vs. BYD Co | Hecla Mining vs. Volkswagen AG | Hecla Mining vs. Volkswagen AG Non Vtg |
| SMA Solar vs. GoldMining | SMA Solar vs. First Majestic Silver | SMA Solar vs. Flow Traders NV | SMA Solar vs. Hecla Mining Co |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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