Correlation Between Hecla Mining and Agnico Eagle
Can any of the company-specific risk be diversified away by investing in both Hecla Mining and Agnico Eagle 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 Agnico Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hecla Mining and Agnico Eagle Mines, you can compare the effects of market volatilities on Hecla Mining and Agnico Eagle 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 Agnico Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hecla Mining and Agnico Eagle.
Diversification Opportunities for Hecla Mining and Agnico Eagle
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hecla and Agnico is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Hecla Mining and Agnico Eagle Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agnico Eagle Mines 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 Agnico Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agnico Eagle Mines has no effect on the direction of Hecla Mining i.e., Hecla Mining and Agnico Eagle go up and down completely randomly.
Pair Corralation between Hecla Mining and Agnico Eagle
Allowing for the 90-day total investment horizon Hecla Mining is expected to generate 2.07 times more return on investment than Agnico Eagle. However, Hecla Mining is 2.07 times more volatile than Agnico Eagle Mines. It trades about 0.27 of its potential returns per unit of risk. Agnico Eagle Mines is currently generating about 0.33 per unit of risk. If you would invest 426.00 in Hecla Mining on January 24, 2024 and sell it today you would earn a total of 80.00 from holding Hecla Mining or generate 18.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Hecla Mining vs. Agnico Eagle Mines
Performance |
Timeline |
Hecla Mining |
Agnico Eagle Mines |
Hecla Mining and Agnico Eagle Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hecla Mining and Agnico Eagle
The main advantage of trading using opposite Hecla Mining and Agnico Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hecla Mining position performs unexpectedly, Agnico Eagle 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 Agnico Eagle will offset losses from the drop in Agnico Eagle'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 |
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 Stocks Directory module to find actively traded stocks across global markets.
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