Correlation Between Hecla Mining and Gold Reserve
Can any of the company-specific risk be diversified away by investing in both Hecla Mining and Gold Reserve 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 Gold Reserve into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hecla Mining and Gold Reserve, you can compare the effects of market volatilities on Hecla Mining and Gold Reserve 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 Gold Reserve. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hecla Mining and Gold Reserve.
Diversification Opportunities for Hecla Mining and Gold Reserve
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hecla and Gold is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Hecla Mining and Gold Reserve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Reserve 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 Gold Reserve. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Reserve has no effect on the direction of Hecla Mining i.e., Hecla Mining and Gold Reserve go up and down completely randomly.
Pair Corralation between Hecla Mining and Gold Reserve
Allowing for the 90-day total investment horizon Hecla Mining is expected to under-perform the Gold Reserve. In addition to that, Hecla Mining is 1.05 times more volatile than Gold Reserve. It trades about -0.3 of its total potential returns per unit of risk. Gold Reserve is currently generating about 0.21 per unit of volatility. If you would invest 300.00 in Gold Reserve on February 5, 2024 and sell it today you would earn a total of 28.00 from holding Gold Reserve or generate 9.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Hecla Mining vs. Gold Reserve
Performance |
Timeline |
Hecla Mining |
Gold Reserve |
Hecla Mining and Gold Reserve Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hecla Mining and Gold Reserve
The main advantage of trading using opposite Hecla Mining and Gold Reserve positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hecla Mining position performs unexpectedly, Gold Reserve 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 Gold Reserve will offset losses from the drop in Gold Reserve's long position.Hecla Mining vs. SilverCrest Metals | Hecla Mining vs. Avino Silver Gold | Hecla Mining vs. New Pacific Metals | Hecla Mining vs. Gatos Silver |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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