Correlation Between Medical Properties and Hecla Mining

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

By analyzing existing cross correlation between Medical Properties Trust and Hecla Mining Co, you can compare the effects of market volatilities on Medical Properties 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 Medical Properties with a short position of Hecla Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Properties and Hecla Mining.

Diversification Opportunities for Medical Properties and Hecla Mining

0.74

Correlation Coefficient

Medical Properties  Hecla Mining

Poor diversification

The 3 months correlation between Medical and Hecla is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Medical Properties Trust and Hecla Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hecla Mining and Medical Properties 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 Medical Properties Trust 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 Medical Properties i.e., Medical Properties and Hecla Mining go up and down completely randomly.

Pair Corralation between Medical Properties and Hecla Mining

Assuming the 90 days trading horizon Medical Properties Trust is expected to generate 1.19 times more return on investment than Hecla Mining. However, Medical Properties is 1.19 times more volatile than Hecla Mining Co. It trades about -0.01 of its potential returns per unit of risk. Hecla Mining Co is currently generating about -0.26 per unit of risk. If you would invest  411.00  in Medical Properties Trust on October 9, 2024 and sell it today you would lose (5.00) from holding Medical Properties Trust or give up 1.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Medical Properties Trust  vs.  Hecla Mining Co

Medical Properties Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Medical Properties Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Hecla Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hecla Mining Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Medical Properties and Hecla Mining

The main advantage of trading using opposite Medical Properties and Hecla Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Properties 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.

The idea behind Medical Properties Trust and Hecla Mining Co 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.

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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 Valuation module to check real value of public entities based on technical and fundamental data.