Correlation Between Hecla Mining and Wheaton Precious
Can any of the company-specific risk be diversified away by investing in both Hecla Mining and Wheaton Precious 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 Wheaton Precious into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hecla Mining and Wheaton Precious Metals, you can compare the effects of market volatilities on Hecla Mining and Wheaton Precious 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 Wheaton Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hecla Mining and Wheaton Precious.
Diversification Opportunities for Hecla Mining and Wheaton Precious
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hecla and Wheaton is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Hecla Mining and Wheaton Precious Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wheaton Precious Metals 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 Wheaton Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wheaton Precious Metals has no effect on the direction of Hecla Mining i.e., Hecla Mining and Wheaton Precious go up and down completely randomly.
Pair Corralation between Hecla Mining and Wheaton Precious
Allowing for the 90-day total investment horizon Hecla Mining is expected to under-perform the Wheaton Precious. But the stock apears to be less risky and, when comparing its historical volatility, Hecla Mining is 1.06 times less risky than Wheaton Precious. The stock trades about -0.45 of its potential returns per unit of risk. The Wheaton Precious Metals is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 6,629 in Wheaton Precious Metals on August 28, 2024 and sell it today you would lose (535.00) from holding Wheaton Precious Metals or give up 8.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hecla Mining vs. Wheaton Precious Metals
Performance |
| Timeline |
| Hecla Mining |
| Wheaton Precious Metals |
Hecla Mining and Wheaton Precious Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hecla Mining and Wheaton Precious
The main advantage of trading using opposite Hecla Mining and Wheaton Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hecla Mining position performs unexpectedly, Wheaton Precious 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 Wheaton Precious will offset losses from the drop in Wheaton Precious' long position.| Hecla Mining vs. SilverCrest Metals | Hecla Mining vs. McEwen Mining | Hecla Mining vs. Avino Silver Gold | Hecla Mining vs. Metalla Royalty Streaming |
| Wheaton Precious vs. Royal Gold | Wheaton Precious vs. Agnico Eagle Mines | Wheaton Precious vs. Sandstorm Gold Ltd | Wheaton Precious vs. Osisko Gold Ro |
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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