Correlation Between New Pacific and Hecla Mining
Can any of the company-specific risk be diversified away by investing in both New Pacific 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 New Pacific and Hecla Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Pacific Metals and Hecla Mining, you can compare the effects of market volatilities on New Pacific 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 New Pacific with a short position of Hecla Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Pacific and Hecla Mining.
Diversification Opportunities for New Pacific and Hecla Mining
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between New and Hecla is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding New Pacific Metals and Hecla Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hecla Mining and New Pacific 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 New Pacific Metals 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 New Pacific i.e., New Pacific and Hecla Mining go up and down completely randomly.
Pair Corralation between New Pacific and Hecla Mining
Given the investment horizon of 90 days New Pacific Metals is expected to generate 1.58 times more return on investment than Hecla Mining. However, New Pacific is 1.58 times more volatile than Hecla Mining. It trades about -0.27 of its potential returns per unit of risk. Hecla Mining is currently generating about -0.43 per unit of risk. If you would invest 194.00 in New Pacific Metals on August 24, 2024 and sell it today you would lose (41.00) from holding New Pacific Metals or give up 21.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Pacific Metals vs. Hecla Mining
Performance |
| Timeline |
| New Pacific Metals |
| Hecla Mining |
New Pacific and Hecla Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Pacific and Hecla Mining
The main advantage of trading using opposite New Pacific and Hecla Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Pacific 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.| New Pacific vs. Endeavour Silver Corp | New Pacific vs. Metalla Royalty Streaming | New Pacific vs. Hecla Mining | New Pacific vs. Gatos Silver |
| Hecla Mining vs. SilverCrest Metals | Hecla Mining vs. McEwen Mining | Hecla Mining vs. Avino Silver Gold | Hecla Mining vs. Metalla Royalty Streaming |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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