Correlation Between Hecla Mining and Teuton Resources

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

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

Diversification Opportunities for Hecla Mining and Teuton Resources

0.23

Correlation Coefficient

Hecla Mining  Teuton Resources

Modest diversification

The 3 months correlation between Hecla and Teuton is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Hecla Mining and Teuton Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teuton Resources 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 Teuton Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teuton Resources Corp has no effect on the direction of Hecla Mining i.e., Hecla Mining and Teuton Resources go up and down completely randomly.

Pair Corralation between Hecla Mining and Teuton Resources

Allowing for the 90-day total investment horizon Hecla Mining is expected to generate 0.96 times more return on investment than Teuton Resources. However, Hecla Mining is 1.04 times less risky than Teuton Resources. It trades about 0.11 of its potential returns per unit of risk. Teuton Resources Corp is currently generating about -0.02 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	Very Weak
Accuracy	100.0%
Values	Daily Returns

Hecla Mining  vs.  Teuton Resources Corp

Hecla Mining

Risk-Adjusted Performance

OK

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.

Teuton Resources Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Teuton Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Teuton Resources is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Hecla Mining and Teuton Resources

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

The idea behind Hecla Mining and Teuton Resources 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.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.