Correlation Between Hecla Mining and Platinum Group
Can any of the company-specific risk be diversified away by investing in both Hecla Mining and Platinum Group 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 Platinum Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hecla Mining and Platinum Group Metals, you can compare the effects of market volatilities on Hecla Mining and Platinum Group 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 Platinum Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hecla Mining and Platinum Group.
Diversification Opportunities for Hecla Mining and Platinum Group
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hecla and Platinum is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Hecla Mining and Platinum Group Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Group Metals 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 are associated (or correlated) with Platinum Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Group Metals has no effect on the direction of Hecla Mining i.e., Hecla Mining and Platinum Group go up and down completely randomly.
Pair Corralation between Hecla Mining and Platinum Group
Assuming the 90 days horizon Hecla Mining is expected to generate 1.0 times less return on investment than Platinum Group. But when comparing it to its historical volatility, Hecla Mining is 5.5 times less risky than Platinum Group. It trades about 0.1 of its potential returns per unit of risk. Platinum Group Metals is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 170.00 in Platinum Group Metals on August 30, 2024 and sell it today you would lose (8.00) from holding Platinum Group Metals or give up 4.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hecla Mining vs. Platinum Group Metals
Performance |
| Timeline |
| Hecla Mining |
| Platinum Group Metals |
Hecla Mining and Platinum Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hecla Mining and Platinum Group
The main advantage of trading using opposite Hecla Mining and Platinum Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hecla Mining position performs unexpectedly, Platinum Group 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 Platinum Group will offset losses from the drop in Platinum Group's long position.| Hecla Mining vs. Triple Flag Precious | Hecla Mining vs. McEwen Mining | Hecla Mining vs. Endeavour Silver Corp | Hecla Mining vs. Hecla Mining |
| Platinum Group vs. Endeavour Silver Corp | Platinum Group vs. Avino Silver Gold | Platinum Group vs. Fortuna Silver Mines | Platinum Group vs. Impala Platinum Holdings |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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