Correlation Between Hecla Mining and Freeport McMoran

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

By analyzing existing cross correlation between Hecla Mining and Freeport McMoran Copper Gold, you can compare the effects of market volatilities on Hecla Mining and Freeport McMoran 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 Freeport McMoran. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hecla Mining and Freeport McMoran.

Diversification Opportunities for Hecla Mining and Freeport McMoran

0.17

Correlation Coefficient

Hecla Mining  Freeport McMoran

Average diversification

The 3 months correlation between Hecla and Freeport is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Hecla Mining and Freeport McMoran Copper Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freeport McMoran Copper 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 Freeport McMoran. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freeport McMoran Copper has no effect on the direction of Hecla Mining i.e., Hecla Mining and Freeport McMoran go up and down completely randomly.

Pair Corralation between Hecla Mining and Freeport McMoran

Allowing for the 90-day total investment horizon Hecla Mining is expected to generate 1.3 times more return on investment than Freeport McMoran. However, Hecla Mining is 1.3 times more volatile than Freeport McMoran Copper Gold. It trades about 0.11 of its potential returns per unit of risk. Freeport McMoran Copper Gold is currently generating about 0.04 per unit of risk. If you would invest  486.00  in Hecla Mining on December 28, 2024 and sell it today you would earn a total of  102.00  from holding Hecla Mining or generate 20.99% return on investment over 90 days.

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

Hecla Mining  vs.  Freeport McMoran Copper Gold

Hecla Mining

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hecla Mining are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal essential indicators, Hecla Mining disclosed solid returns over the last few months and may actually be approaching a breakup point.

Freeport McMoran Copper

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Freeport McMoran Copper Gold are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating fundamental indicators, Freeport McMoran may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Hecla Mining and Freeport McMoran

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

The idea behind Hecla Mining and Freeport McMoran Copper Gold 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.

Check out your portfolio center.

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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..