Correlation Between Hecla Mining and Aris Mining

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

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

Diversification Opportunities for Hecla Mining and Aris Mining

0.71

Correlation Coefficient

Hecla Mining  Aris Mining

Poor diversification

The 3 months correlation between Hecla and Aris is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Hecla Mining and Aris Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aris Mining 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 are associated (or correlated) with Aris Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aris Mining has no effect on the direction of Hecla Mining i.e., Hecla Mining and Aris Mining go up and down completely randomly.

Pair Corralation between Hecla Mining and Aris Mining

Allowing for the 90-day total investment horizon Hecla Mining is expected to under-perform the Aris Mining. In addition to that, Hecla Mining is 1.66 times more volatile than Aris Mining. It trades about -0.11 of its total potential returns per unit of risk. Aris Mining is currently generating about 0.05 per unit of volatility. If you would invest  363.00  in Aris Mining on December 3, 2024 and sell it today you would earn a total of  7.00  from holding Aris Mining or generate 1.93% return on investment over 90 days.

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

Hecla Mining  vs.  Aris Mining

Hecla Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hecla Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's essential indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Aris Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aris Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Aris Mining is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Hecla Mining and Aris Mining

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

The idea behind Hecla Mining and Aris Mining 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.