Correlation Between IShares Physical and Hecla Mining
Can any of the company-specific risk be diversified away by investing in both IShares Physical and Hecla 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 IShares Physical and Hecla Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Physical Silver and Hecla Mining Co, you can compare the effects of market volatilities on IShares Physical and Hecla 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 IShares Physical with a short position of Hecla Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Physical and Hecla Mining.
Diversification Opportunities for IShares Physical and Hecla Mining
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and Hecla is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding iShares Physical Silver and Hecla Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hecla Mining and IShares Physical 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 iShares Physical Silver are associated (or correlated) with Hecla Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hecla Mining has no effect on the direction of IShares Physical i.e., IShares Physical and Hecla Mining go up and down completely randomly.
Pair Corralation between IShares Physical and Hecla Mining
Assuming the 90 days trading horizon iShares Physical Silver is expected to generate 0.68 times more return on investment than Hecla Mining. However, iShares Physical Silver is 1.47 times less risky than Hecla Mining. It trades about -0.19 of its potential returns per unit of risk. Hecla Mining Co is currently generating about -0.18 per unit of risk. If you would invest 3,065 in iShares Physical Silver on October 12, 2024 and sell it today you would lose (181.00) from holding iShares Physical Silver or give up 5.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
iShares Physical Silver vs. Hecla Mining Co
Performance |
| Timeline |
| iShares Physical Silver |
| Hecla Mining |
IShares Physical and Hecla Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Physical and Hecla Mining
The main advantage of trading using opposite IShares Physical and Hecla Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Physical position performs unexpectedly, Hecla 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 Hecla Mining will offset losses from the drop in Hecla Mining's long position.| IShares Physical vs. Symphony Environmental Technologies | IShares Physical vs. SMA Solar Technology | IShares Physical vs. Costco Wholesale Corp | IShares Physical vs. Sartorius Stedim Biotech |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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