Correlation Between Lundin Mining and Hecla Mining
Can any of the company-specific risk be diversified away by investing in both Lundin Mining 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 Lundin Mining and Hecla Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lundin Mining Corp and Hecla Mining Co, you can compare the effects of market volatilities on Lundin Mining 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 Lundin Mining with a short position of Hecla Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and Hecla Mining.
Diversification Opportunities for Lundin Mining and Hecla Mining
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lundin and Hecla is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and Hecla Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hecla Mining and Lundin 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 Lundin Mining Corp 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 Lundin Mining i.e., Lundin Mining and Hecla Mining go up and down completely randomly.
Pair Corralation between Lundin Mining and Hecla Mining
Assuming the 90 days trading horizon Lundin Mining is expected to generate 3.76 times less return on investment than Hecla Mining. But when comparing it to its historical volatility, Lundin Mining Corp is 1.23 times less risky than Hecla Mining. It trades about 0.02 of its potential returns per unit of risk. Hecla Mining Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 355.00 in Hecla Mining Co on November 3, 2024 and sell it today you would earn a total of 219.00 from holding Hecla Mining Co or generate 61.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Lundin Mining Corp vs. Hecla Mining Co
Performance |
| Timeline |
| Lundin Mining Corp |
| Hecla Mining |
Lundin Mining and Hecla Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and Hecla Mining
The main advantage of trading using opposite Lundin Mining and Hecla Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining 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.| Lundin Mining vs. Bankers Investment Trust | Lundin Mining vs. Metro Bank PLC | Lundin Mining vs. Southwest Airlines Co | Lundin Mining vs. McEwen Mining |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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