Correlation Between Hecla Mining and Edinburgh Investment
Can any of the company-specific risk be diversified away by investing in both Hecla Mining and Edinburgh Investment 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 Edinburgh Investment 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 Edinburgh Investment Trust, you can compare the effects of market volatilities on Hecla Mining and Edinburgh Investment 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 Edinburgh Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hecla Mining and Edinburgh Investment.
Diversification Opportunities for Hecla Mining and Edinburgh Investment
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hecla and Edinburgh is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Hecla Mining Co and Edinburgh Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edinburgh Investment 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 Edinburgh Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edinburgh Investment has no effect on the direction of Hecla Mining i.e., Hecla Mining and Edinburgh Investment go up and down completely randomly.
Pair Corralation between Hecla Mining and Edinburgh Investment
Assuming the 90 days trading horizon Hecla Mining Co is expected to generate 2.65 times more return on investment than Edinburgh Investment. However, Hecla Mining is 2.65 times more volatile than Edinburgh Investment Trust. It trades about 0.29 of its potential returns per unit of risk. Edinburgh Investment Trust is currently generating about 0.1 per unit of risk. If you would invest 498.00 in Hecla Mining Co on October 28, 2024 and sell it today you would earn a total of 65.00 from holding Hecla Mining Co or generate 13.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hecla Mining Co vs. Edinburgh Investment Trust
Performance |
| Timeline |
| Hecla Mining |
| Edinburgh Investment |
Hecla Mining and Edinburgh Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hecla Mining and Edinburgh Investment
The main advantage of trading using opposite Hecla Mining and Edinburgh Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hecla Mining position performs unexpectedly, Edinburgh Investment 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 Edinburgh Investment will offset losses from the drop in Edinburgh Investment's long position.| Hecla Mining vs. Berkshire Hathaway | Hecla Mining vs. Samsung Electronics Co | Hecla Mining vs. Samsung Electronics Co | Hecla Mining vs. Chocoladefabriken Lindt Spruengli |
| Edinburgh Investment vs. Atalaya Mining | Edinburgh Investment vs. Lundin Mining Corp | Edinburgh Investment vs. Beowulf Mining | Edinburgh Investment vs. Evolution Gaming Group |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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