Correlation Between Hecla Mining and Vodafone Group

Can any of the company-specific risk be diversified away by investing in both Hecla Mining and Vodafone Group 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 Vodafone Group 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 Vodafone Group PLC, you can compare the effects of market volatilities on Hecla Mining and Vodafone Group 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 Vodafone Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hecla Mining and Vodafone Group.

Diversification Opportunities for Hecla Mining and Vodafone Group

0.27

Correlation Coefficient

Hecla Mining  Vodafone Group

Modest diversification

The 3 months correlation between Hecla and Vodafone is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Hecla Mining Co and Vodafone Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vodafone Group PLC 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 Vodafone Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vodafone Group PLC has no effect on the direction of Hecla Mining i.e., Hecla Mining and Vodafone Group go up and down completely randomly.

Pair Corralation between Hecla Mining and Vodafone Group

Assuming the 90 days trading horizon Hecla Mining Co is expected to generate 2.08 times more return on investment than Vodafone Group. However, Hecla Mining is 2.08 times more volatile than Vodafone Group PLC. It trades about 0.08 of its potential returns per unit of risk. Vodafone Group PLC is currently generating about 0.15 per unit of risk. If you would invest  507.00  in Hecla Mining Co on December 24, 2024 and sell it today you would earn a total of  67.00  from holding Hecla Mining Co or generate 13.21% return on investment over 90 days.

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

Hecla Mining Co  vs.  Vodafone Group PLC

Hecla Mining

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hecla Mining Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Hecla Mining unveiled solid returns over the last few months and may actually be approaching a breakup point.

Vodafone Group PLC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vodafone Group PLC are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Vodafone Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hecla Mining and Vodafone Group

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

The idea behind Hecla Mining Co and Vodafone Group PLC 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.