Correlation Between Hecla Mining and Sonoro Gold
Can any of the company-specific risk be diversified away by investing in both Hecla Mining and Sonoro 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 Sonoro 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 Sonoro Gold Corp, you can compare the effects of market volatilities on Hecla Mining and Sonoro 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 Sonoro Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hecla Mining and Sonoro Gold.
Diversification Opportunities for Hecla Mining and Sonoro Gold
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hecla and Sonoro is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Hecla Mining and Sonoro Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonoro 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 Sonoro Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonoro Gold Corp has no effect on the direction of Hecla Mining i.e., Hecla Mining and Sonoro Gold go up and down completely randomly.
Pair Corralation between Hecla Mining and Sonoro Gold
Allowing for the 90-day total investment horizon Hecla Mining is expected to under-perform the Sonoro Gold. But the stock apears to be less risky and, when comparing its historical volatility, Hecla Mining is 4.55 times less risky than Sonoro Gold. The stock trades about -0.37 of its potential returns per unit of risk. The Sonoro Gold Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 6.27 in Sonoro Gold Corp on September 1, 2024 and sell it today you would lose (0.22) from holding Sonoro Gold Corp or give up 3.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Hecla Mining vs. Sonoro Gold Corp
Performance |
| Timeline |
| Hecla Mining |
| Sonoro Gold Corp |
Hecla Mining and Sonoro Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hecla Mining and Sonoro Gold
The main advantage of trading using opposite Hecla Mining and Sonoro Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hecla Mining position performs unexpectedly, Sonoro 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 Sonoro Gold will offset losses from the drop in Sonoro 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 |
| Sonoro Gold vs. Endeavour Silver Corp | Sonoro Gold vs. Metalla Royalty Streaming | Sonoro Gold vs. New Pacific Metals | Sonoro Gold vs. Hecla Mining |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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