Correlation Between Hecla Mining and Vox Royalty
Can any of the company-specific risk be diversified away by investing in both Hecla Mining and Vox Royalty 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 Vox Royalty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hecla Mining and Vox Royalty Corp, you can compare the effects of market volatilities on Hecla Mining and Vox Royalty 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 Vox Royalty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hecla Mining and Vox Royalty.
Diversification Opportunities for Hecla Mining and Vox Royalty
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hecla and Vox is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Hecla Mining and Vox Royalty Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vox Royalty 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 Vox Royalty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vox Royalty Corp has no effect on the direction of Hecla Mining i.e., Hecla Mining and Vox Royalty go up and down completely randomly.
Pair Corralation between Hecla Mining and Vox Royalty
Allowing for the 90-day total investment horizon Hecla Mining is expected to under-perform the Vox Royalty. But the stock apears to be less risky and, when comparing its historical volatility, Hecla Mining is 1.26 times less risky than Vox Royalty. The stock trades about -0.44 of its potential returns per unit of risk. The Vox Royalty Corp is currently generating about -0.22 of returns per unit of risk over similar time horizon. If you would invest 307.00 in Vox Royalty Corp on August 28, 2024 and sell it today you would lose (42.00) from holding Vox Royalty Corp or give up 13.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hecla Mining vs. Vox Royalty Corp
Performance |
| Timeline |
| Hecla Mining |
| Vox Royalty Corp |
Hecla Mining and Vox Royalty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hecla Mining and Vox Royalty
The main advantage of trading using opposite Hecla Mining and Vox Royalty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hecla Mining position performs unexpectedly, Vox Royalty 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 Vox Royalty will offset losses from the drop in Vox Royalty's long position.| Hecla Mining vs. Gold Royalty Corp | Hecla Mining vs. SilverCrest Metals | Hecla Mining vs. Avino Silver Gold | Hecla Mining vs. Metalla Royalty Streaming |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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