Correlation Between Hycroft Mining and Contango ORE

Can any of the company-specific risk be diversified away by investing in both Hycroft Mining and Contango ORE 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 Hycroft Mining and Contango ORE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hycroft Mining Holding and Contango ORE, you can compare the effects of market volatilities on Hycroft Mining and Contango ORE 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 Hycroft Mining with a short position of Contango ORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hycroft Mining and Contango ORE.

Diversification Opportunities for Hycroft Mining and Contango ORE

0.02

Correlation Coefficient

Hycroft Mining  Contango ORE

Significant diversification

The 3 months correlation between Hycroft and Contango is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Hycroft Mining Holding and Contango ORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contango ORE and Hycroft 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 Hycroft Mining Holding are associated (or correlated) with Contango ORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contango ORE has no effect on the direction of Hycroft Mining i.e., Hycroft Mining and Contango ORE go up and down completely randomly.

Pair Corralation between Hycroft Mining and Contango ORE

Assuming the 90 days horizon Hycroft Mining Holding is expected to generate 4.28 times more return on investment than Contango ORE. However, Hycroft Mining is 4.28 times more volatile than Contango ORE. It trades about 0.04 of its potential returns per unit of risk. Contango ORE is currently generating about 0.03 per unit of risk. If you would invest  1.40  in Hycroft Mining Holding on May 28, 2025 and sell it today you would lose (0.28) from holding Hycroft Mining Holding or give up 20.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Hycroft Mining Holding  vs.  Contango ORE

Hycroft Mining Holding

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Hycroft Mining Holding are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal fundamental indicators, Hycroft Mining disclosed solid returns over the last few months and may actually be approaching a breakup point.

Contango ORE

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Contango ORE are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Contango ORE is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Hycroft Mining and Contango ORE

The main advantage of trading using opposite Hycroft Mining and Contango ORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hycroft Mining position performs unexpectedly, Contango ORE 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 Contango ORE will offset losses from the drop in Contango ORE's long position.

The idea behind Hycroft Mining Holding and Contango ORE pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.