Correlation Between Lloyds Banking and Hecla Mining
Can any of the company-specific risk be diversified away by investing in both Lloyds Banking 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 Lloyds Banking and Hecla Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lloyds Banking Group and Hecla Mining Co, you can compare the effects of market volatilities on Lloyds Banking 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 Lloyds Banking with a short position of Hecla Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lloyds Banking and Hecla Mining.
Diversification Opportunities for Lloyds Banking and Hecla Mining
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lloyds and Hecla is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Banking Group and Hecla Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hecla Mining and Lloyds Banking 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 Lloyds Banking Group 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 Lloyds Banking i.e., Lloyds Banking and Hecla Mining go up and down completely randomly.
Pair Corralation between Lloyds Banking and Hecla Mining
Assuming the 90 days trading horizon Lloyds Banking Group is expected to under-perform the Hecla Mining. But the stock apears to be less risky and, when comparing its historical volatility, Lloyds Banking Group is 3.33 times less risky than Hecla Mining. The stock trades about -0.15 of its potential returns per unit of risk. The Hecla Mining Co is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 495.00 in Hecla Mining Co on October 20, 2024 and sell it today you would earn a total of 51.00 from holding Hecla Mining Co or generate 10.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Lloyds Banking Group vs. Hecla Mining Co
Performance |
| Timeline |
| Lloyds Banking Group |
| Hecla Mining |
Lloyds Banking and Hecla Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lloyds Banking and Hecla Mining
The main advantage of trading using opposite Lloyds Banking and Hecla Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lloyds Banking 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.| Lloyds Banking vs. Axway Software SA | Lloyds Banking vs. STMicroelectronics NV | Lloyds Banking vs. Software Circle plc | Lloyds Banking vs. Bisichi Mining PLC |
| Hecla Mining vs. Universal Music Group | Hecla Mining vs. Bloomsbury Publishing Plc | Hecla Mining vs. Alien Metals | Hecla Mining vs. Power Metal Resources |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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