Correlation Between American Copper and Hecla Mining
Can any of the company-specific risk be diversified away by investing in both American Copper 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 American Copper and Hecla Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Copper Development and Hecla Mining, you can compare the effects of market volatilities on American Copper 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 American Copper with a short position of Hecla Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Copper and Hecla Mining.
Diversification Opportunities for American Copper and Hecla Mining
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Hecla is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding American Copper Development and Hecla Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hecla Mining and American Copper 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 American Copper Development 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 American Copper i.e., American Copper and Hecla Mining go up and down completely randomly.
Pair Corralation between American Copper and Hecla Mining
Assuming the 90 days horizon American Copper Development is expected to under-perform the Hecla Mining. In addition to that, American Copper is 8.31 times more volatile than Hecla Mining. It trades about -0.1 of its total potential returns per unit of risk. Hecla Mining is currently generating about -0.43 per unit of volatility. If you would invest 716.00 in Hecla Mining on August 24, 2024 and sell it today you would lose (147.00) from holding Hecla Mining or give up 20.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
American Copper Development vs. Hecla Mining
Performance |
| Timeline |
| American Copper Deve |
| Hecla Mining |
American Copper and Hecla Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Copper and Hecla Mining
The main advantage of trading using opposite American Copper and Hecla Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Copper 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.| American Copper vs. Insteel Industries | American Copper vs. United States Steel | American Copper vs. Xponential Fitness | American Copper vs. Emerson Radio |
| Hecla Mining vs. SilverCrest Metals | Hecla Mining vs. McEwen Mining | Hecla Mining vs. Avino Silver Gold | Hecla Mining vs. Metalla Royalty Streaming |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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