Correlation Between Hecla Mining and Games Workshop

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

Diversification Opportunities for Hecla Mining and Games Workshop

-0.06

Correlation Coefficient

Hecla Mining  Games Workshop

Good diversification

The 3 months correlation between Hecla and Games is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Hecla Mining Co and Games Workshop Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Games Workshop Group 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 Games Workshop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Games Workshop Group has no effect on the direction of Hecla Mining i.e., Hecla Mining and Games Workshop go up and down completely randomly.

Pair Corralation between Hecla Mining and Games Workshop

Assuming the 90 days trading horizon Hecla Mining is expected to generate 1.67 times less return on investment than Games Workshop. In addition to that, Hecla Mining is 2.12 times more volatile than Games Workshop Group. It trades about 0.02 of its total potential returns per unit of risk. Games Workshop Group is currently generating about 0.06 per unit of volatility. If you would invest  857,636  in Games Workshop Group on October 26, 2024 and sell it today you would earn a total of  573,364  from holding Games Workshop Group or generate 66.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

Hecla Mining Co  vs.  Games Workshop Group

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.

Games Workshop Group

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Games Workshop Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Games Workshop exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hecla Mining and Games Workshop

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

The idea behind Hecla Mining Co and Games Workshop Group 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .