Correlation Between Hecla Mining and Malvern International

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

Diversification Opportunities for Hecla Mining and Malvern International

-0.51

Correlation Coefficient

Hecla Mining  Malvern International

Excellent diversification

The 3 months correlation between Hecla and Malvern is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Hecla Mining Co and Malvern International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malvern International 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 Malvern International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malvern International has no effect on the direction of Hecla Mining i.e., Hecla Mining and Malvern International go up and down completely randomly.

Pair Corralation between Hecla Mining and Malvern International

Assuming the 90 days trading horizon Hecla Mining Co is expected to generate 1.54 times more return on investment than Malvern International. However, Hecla Mining is 1.54 times more volatile than Malvern International. It trades about 0.19 of its potential returns per unit of risk. Malvern International is currently generating about 0.11 per unit of risk. If you would invest  509.00  in Hecla Mining Co on October 22, 2024 and sell it today you would earn a total of  37.00  from holding Hecla Mining Co or generate 7.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	94.74%
Values	Daily Returns

Hecla Mining Co  vs.  Malvern International

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 weak 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.

Malvern International

Risk-Adjusted Performance

5 of 100

Modest

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

Pair Trading with Hecla Mining and Malvern International

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

The idea behind Hecla Mining Co and Malvern International 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.