Correlation Between Hycroft Mining and Enlightify

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

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

Diversification Opportunities for Hycroft Mining and Enlightify

0.88

Correlation Coefficient

Hycroft Mining  Enlightify

Very poor diversification

The 3 months correlation between Hycroft and Enlightify is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Hycroft Mining Holding and Enlightify in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enlightify and Hycroft 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 Hycroft Mining Holding are associated (or correlated) with Enlightify. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enlightify has no effect on the direction of Hycroft Mining i.e., Hycroft Mining and Enlightify go up and down completely randomly.

Pair Corralation between Hycroft Mining and Enlightify

Assuming the 90 days horizon Hycroft Mining Holding is expected to generate 1.71 times more return on investment than Enlightify. However, Hycroft Mining is 1.71 times more volatile than Enlightify. It trades about -0.04 of its potential returns per unit of risk. Enlightify is currently generating about -0.16 per unit of risk. If you would invest  2.90  in Hycroft Mining Holding on October 25, 2024 and sell it today you would lose (1.30) from holding Hycroft Mining Holding or give up 44.83% of portfolio value over 90 days.

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

Hycroft Mining Holding  vs.  Enlightify

Hycroft Mining Holding

Risk-Adjusted Performance

0 of 100

Very Weak

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

Enlightify

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enlightify has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Hycroft Mining and Enlightify

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

The idea behind Hycroft Mining Holding and Enlightify 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 Stocks Directory module to find actively traded stocks across global markets.