Correlation Between River and Hecla Mining
Can any of the company-specific risk be diversified away by investing in both River 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 River and Hecla Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between River and Mercantile and Hecla Mining Co, you can compare the effects of market volatilities on River 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 River with a short position of Hecla Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of River and Hecla Mining.
Diversification Opportunities for River and Hecla Mining
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between River and Hecla is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding River and Mercantile and Hecla Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hecla Mining and River 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 River and Mercantile 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 River i.e., River and Hecla Mining go up and down completely randomly.
Pair Corralation between River and Hecla Mining
Assuming the 90 days trading horizon River is expected to generate 1.45 times less return on investment than Hecla Mining. But when comparing it to its historical volatility, River and Mercantile is 2.26 times less risky than Hecla Mining. It trades about 0.06 of its potential returns per unit of risk. Hecla Mining Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 486.00 in Hecla Mining Co on September 12, 2024 and sell it today you would earn a total of 95.00 from holding Hecla Mining Co or generate 19.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
River and Mercantile vs. Hecla Mining Co
Performance |
| Timeline |
| River and Mercantile |
| Hecla Mining |
River and Hecla Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with River and Hecla Mining
The main advantage of trading using opposite River and Hecla Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if River 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.| River vs. Batm Advanced Communications | River vs. MTI Wireless Edge | River vs. Kinnevik Investment AB | River vs. Lowland Investment Co |
| Hecla Mining vs. Hong Kong Land | Hecla Mining vs. Neometals | Hecla Mining vs. Coor Service Management | Hecla Mining vs. Fidelity Sustainable USD |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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