Correlation Between Hecla Mining and Alien Metals
Can any of the company-specific risk be diversified away by investing in both Hecla Mining and Alien Metals 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 Alien Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hecla Mining and Alien Metals, you can compare the effects of market volatilities on Hecla Mining and Alien Metals 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 Alien Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hecla Mining and Alien Metals.
Diversification Opportunities for Hecla Mining and Alien Metals
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hecla and Alien is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Hecla Mining and Alien Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alien 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 Alien Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alien Metals has no effect on the direction of Hecla Mining i.e., Hecla Mining and Alien Metals go up and down completely randomly.
Pair Corralation between Hecla Mining and Alien Metals
Allowing for the 90-day total investment horizon Hecla Mining is expected to generate 43.46 times less return on investment than Alien Metals. But when comparing it to its historical volatility, Hecla Mining is 26.34 times less risky than Alien Metals. It trades about 0.11 of its potential returns per unit of risk. Alien Metals is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 0.10 in Alien Metals on September 12, 2024 and sell it today you would earn a total of 0.02 from holding Alien Metals or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Hecla Mining vs. Alien Metals
Performance |
| Timeline |
| Hecla Mining |
| Alien Metals |
Hecla Mining and Alien Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hecla Mining and Alien Metals
The main advantage of trading using opposite Hecla Mining and Alien Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hecla Mining position performs unexpectedly, Alien Metals 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 Alien Metals will offset losses from the drop in Alien Metals' long position.| Hecla Mining vs. SilverCrest Metals | Hecla Mining vs. McEwen Mining | Hecla Mining vs. Avino Silver Gold | Hecla Mining vs. Metalla Royalty Streaming |
| Alien Metals vs. Gold79 Mines | Alien Metals vs. Arctic Star Exploration | Alien Metals vs. Arras Minerals Corp | Alien Metals vs. American Creek Resources |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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