Correlation Between Hecla Mining and Gold Fields
Can any of the company-specific risk be diversified away by investing in both Hecla Mining and Gold Fields 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 Gold Fields into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hecla Mining and Gold Fields Ltd, you can compare the effects of market volatilities on Hecla Mining and Gold Fields 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 Gold Fields. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hecla Mining and Gold Fields.
Diversification Opportunities for Hecla Mining and Gold Fields
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hecla and Gold is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Hecla Mining and Gold Fields Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Fields 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 Gold Fields. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Fields has no effect on the direction of Hecla Mining i.e., Hecla Mining and Gold Fields go up and down completely randomly.
Pair Corralation between Hecla Mining and Gold Fields
Allowing for the 90-day total investment horizon Hecla Mining is expected to generate 1.09 times more return on investment than Gold Fields. However, Hecla Mining is 1.09 times more volatile than Gold Fields Ltd. It trades about 0.03 of its potential returns per unit of risk. Gold Fields Ltd is currently generating about 0.02 per unit of risk. If you would invest 494.00 in Hecla Mining on August 26, 2024 and sell it today you would earn a total of 58.00 from holding Hecla Mining or generate 11.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hecla Mining vs. Gold Fields Ltd
Performance |
| Timeline |
| Hecla Mining |
| Gold Fields |
Hecla Mining and Gold Fields Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hecla Mining and Gold Fields
The main advantage of trading using opposite Hecla Mining and Gold Fields positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hecla Mining position performs unexpectedly, Gold Fields 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 Gold Fields will offset losses from the drop in Gold Fields' 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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