Correlation Between Hecla Mining and McEwen Mining
Can any of the company-specific risk be diversified away by investing in both Hecla Mining and McEwen 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 Hecla Mining and McEwen Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hecla Mining and McEwen Mining, you can compare the effects of market volatilities on Hecla Mining and McEwen 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 Hecla Mining with a short position of McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hecla Mining and McEwen Mining.
Diversification Opportunities for Hecla Mining and McEwen Mining
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hecla and McEwen is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Hecla Mining and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining 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 McEwen Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of McEwen Mining has no effect on the direction of Hecla Mining i.e., Hecla Mining and McEwen Mining go up and down completely randomly.
Pair Corralation between Hecla Mining and McEwen Mining
Allowing for the 90-day total investment horizon Hecla Mining is expected to under-perform the McEwen Mining. But the stock apears to be less risky and, when comparing its historical volatility, Hecla Mining is 1.16 times less risky than McEwen Mining. The stock trades about -0.41 of its potential returns per unit of risk. The McEwen Mining is currently generating about -0.35 of returns per unit of risk over similar time horizon. If you would invest 1,030 in McEwen Mining on August 27, 2024 and sell it today you would lose (192.00) from holding McEwen Mining or give up 18.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hecla Mining vs. McEwen Mining
Performance |
| Timeline |
| Hecla Mining |
| McEwen Mining |
Hecla Mining and McEwen Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hecla Mining and McEwen Mining
The main advantage of trading using opposite Hecla Mining and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hecla Mining position performs unexpectedly, McEwen 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 McEwen Mining will offset losses from the drop in McEwen Mining'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 |
| McEwen Mining vs. Gold Royalty Corp | McEwen Mining vs. SilverCrest Metals | McEwen Mining vs. Hecla Mining | McEwen Mining vs. Avino Silver Gold |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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