Correlation Between Home Depot and Hecla Mining
Can any of the company-specific risk be diversified away by investing in both Home Depot 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 Home Depot and Hecla Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Depot and Hecla Mining Co, you can compare the effects of market volatilities on Home Depot 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 Home Depot with a short position of Hecla Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and Hecla Mining.
Diversification Opportunities for Home Depot and Hecla Mining
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Home and Hecla is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and Hecla Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hecla Mining and Home Depot 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 Home Depot 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 Home Depot i.e., Home Depot and Hecla Mining go up and down completely randomly.
Pair Corralation between Home Depot and Hecla Mining
Assuming the 90 days trading horizon Home Depot is expected to generate 6.16 times less return on investment than Hecla Mining. But when comparing it to its historical volatility, Home Depot is 12.42 times less risky than Hecla Mining. It trades about 0.22 of its potential returns per unit of risk. Hecla Mining Co is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 540.00 in Hecla Mining Co on September 13, 2024 and sell it today you would earn a total of 41.00 from holding Hecla Mining Co or generate 7.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Home Depot vs. Hecla Mining Co
Performance |
| Timeline |
| Home Depot |
| Hecla Mining |
Home Depot and Hecla Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and Hecla Mining
The main advantage of trading using opposite Home Depot and Hecla Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot 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.| Home Depot vs. One Media iP | Home Depot vs. LBG Media PLC | Home Depot vs. Intermediate Capital Group | Home Depot vs. Catalyst Media Group |
| Hecla Mining vs. Bloomsbury Publishing Plc | Hecla Mining vs. Monks Investment Trust | Hecla Mining vs. Schroders Investment Trusts | Hecla Mining vs. Fevertree Drinks Plc |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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