Correlation Between Hecla Mining and Gold Royalty

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

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

Diversification Opportunities for Hecla Mining and Gold Royalty

0.75

Correlation Coefficient

Hecla Mining  Gold Royalty

Poor diversification

The 3 months correlation between Hecla and Gold is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Hecla Mining and Gold Royalty Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Royalty Corp 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 Gold Royalty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Royalty Corp has no effect on the direction of Hecla Mining i.e., Hecla Mining and Gold Royalty go up and down completely randomly.

Pair Corralation between Hecla Mining and Gold Royalty

Allowing for the 90-day total investment horizon Hecla Mining is expected to under-perform the Gold Royalty. In addition to that, Hecla Mining is 1.24 times more volatile than Gold Royalty Corp. It trades about -0.09 of its total potential returns per unit of risk. Gold Royalty Corp is currently generating about -0.01 per unit of volatility. If you would invest  132.00  in Gold Royalty Corp on September 15, 2024 and sell it today you would lose (5.00) from holding Gold Royalty Corp or give up 3.79% of portfolio value over 90 days.

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

Hecla Mining  vs.  Gold Royalty Corp

Hecla Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hecla Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Gold Royalty Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gold Royalty Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Gold Royalty is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hecla Mining and Gold Royalty

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

The idea behind Hecla Mining and Gold Royalty Corp 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.