Correlation Between Ethereum and Hecla Mining

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

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

Diversification Opportunities for Ethereum and Hecla Mining

-0.4

Correlation Coefficient

Ethereum  Hecla Mining

Very good diversification

The 3 months correlation between Ethereum and Hecla is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum and Hecla Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hecla Mining and Ethereum 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 Ethereum 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 Ethereum i.e., Ethereum and Hecla Mining go up and down completely randomly.

Pair Corralation between Ethereum and Hecla Mining

Assuming the 90 days trading horizon Ethereum is expected to under-perform the Hecla Mining. In addition to that, Ethereum is 1.23 times more volatile than Hecla Mining Co. It trades about -0.2 of its total potential returns per unit of risk. Hecla Mining Co is currently generating about 0.07 per unit of volatility. 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 Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Ethereum  vs.  Hecla Mining Co

Ethereum

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ethereum has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's technical indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for Ethereum shareholders.

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 Ethereum and Hecla Mining

The main advantage of trading using opposite Ethereum and Hecla Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ethereum 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 Ethereum 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.