Correlation Between Hecla Mining and MT Bank

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

By analyzing existing cross correlation between Hecla Mining Co and MT Bank Corp, you can compare the effects of market volatilities on Hecla Mining and MT Bank 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 MT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hecla Mining and MT Bank.

Diversification Opportunities for Hecla Mining and MT Bank

-0.41

Correlation Coefficient

Hecla Mining  MT Bank

Very good diversification

The 3 months correlation between Hecla and 0JW2 is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Hecla Mining Co and MT Bank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MT Bank Corp 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 Co are associated (or correlated) with MT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MT Bank Corp has no effect on the direction of Hecla Mining i.e., Hecla Mining and MT Bank go up and down completely randomly.

Pair Corralation between Hecla Mining and MT Bank

Assuming the 90 days trading horizon Hecla Mining Co is expected to under-perform the MT Bank. In addition to that, Hecla Mining is 1.63 times more volatile than MT Bank Corp. It trades about -0.26 of its total potential returns per unit of risk. MT Bank Corp is currently generating about -0.26 per unit of volatility. If you would invest  20,703  in MT Bank Corp on October 10, 2024 and sell it today you would lose (1,580) from holding MT Bank Corp or give up 7.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

Hecla Mining Co  vs.  MT Bank Corp

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.

MT Bank Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MT Bank Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, MT Bank may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Hecla Mining and MT Bank

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

The idea behind Hecla Mining Co and MT Bank Corp 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.