Correlation Between Centaur Media and Hecla Mining

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

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

Diversification Opportunities for Centaur Media and Hecla Mining

0.45

Correlation Coefficient

Centaur Media  Hecla Mining

Very weak diversification

The 3 months correlation between Centaur and Hecla is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Centaur Media and Hecla Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hecla Mining and Centaur Media 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 Centaur Media 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 Centaur Media i.e., Centaur Media and Hecla Mining go up and down completely randomly.

Pair Corralation between Centaur Media and Hecla Mining

Assuming the 90 days trading horizon Centaur Media is expected to generate 1.06 times less return on investment than Hecla Mining. But when comparing it to its historical volatility, Centaur Media is 1.18 times less risky than Hecla Mining. It trades about 0.08 of its potential returns per unit of risk. Hecla Mining Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  508.00  in Hecla Mining Co on December 22, 2024 and sell it today you would earn a total of  66.00  from holding Hecla Mining Co or generate 12.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Centaur Media  vs.  Hecla Mining Co

Centaur Media

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Centaur Media are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Centaur Media exhibited solid returns over the last few months and may actually be approaching a breakup point.

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 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Hecla Mining unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Centaur Media and Hecla Mining

The main advantage of trading using opposite Centaur Media and Hecla Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centaur Media 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 Centaur Media 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.