Correlation Between Hecla Mining and Eldorado Gold
Can any of the company-specific risk be diversified away by investing in both Hecla Mining and Eldorado Gold 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 Eldorado Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hecla Mining and Eldorado Gold Corp, you can compare the effects of market volatilities on Hecla Mining and Eldorado Gold 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 Eldorado Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hecla Mining and Eldorado Gold.
Diversification Opportunities for Hecla Mining and Eldorado Gold
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hecla and Eldorado is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Hecla Mining and Eldorado Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eldorado Gold Corp 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 Eldorado Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eldorado Gold Corp has no effect on the direction of Hecla Mining i.e., Hecla Mining and Eldorado Gold go up and down completely randomly.
Pair Corralation between Hecla Mining and Eldorado Gold
Allowing for the 90-day total investment horizon Hecla Mining is expected to generate 1.49 times more return on investment than Eldorado Gold. However, Hecla Mining is 1.49 times more volatile than Eldorado Gold Corp. It trades about 0.09 of its potential returns per unit of risk. Eldorado Gold Corp is currently generating about 0.12 per unit of risk. If you would invest 351.00 in Hecla Mining on August 27, 2024 and sell it today you would earn a total of 201.00 from holding Hecla Mining or generate 57.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hecla Mining vs. Eldorado Gold Corp
Performance |
| Timeline |
| Hecla Mining |
| Eldorado Gold Corp |
Hecla Mining and Eldorado Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hecla Mining and Eldorado Gold
The main advantage of trading using opposite Hecla Mining and Eldorado Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hecla Mining position performs unexpectedly, Eldorado Gold 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 Eldorado Gold will offset losses from the drop in Eldorado Gold's long position.| 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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