Correlation Between Hycroft Mining and Pan American

Can any of the company-specific risk be diversified away by investing in both Hycroft Mining and Pan American 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 Pan American 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 Pan American Silver, you can compare the effects of market volatilities on Hycroft Mining and Pan American 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 Pan American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hycroft Mining and Pan American.

Diversification Opportunities for Hycroft Mining and Pan American

0.67

Correlation Coefficient

Hycroft Mining  Pan American

Poor diversification

The 3 months correlation between Hycroft and Pan is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Hycroft Mining Holding and Pan American Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan American Silver 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 Pan American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan American Silver has no effect on the direction of Hycroft Mining i.e., Hycroft Mining and Pan American go up and down completely randomly.

Pair Corralation between Hycroft Mining and Pan American

Assuming the 90 days horizon Hycroft Mining Holding is expected to under-perform the Pan American. In addition to that, Hycroft Mining is 3.91 times more volatile than Pan American Silver. It trades about -0.04 of its total potential returns per unit of risk. Pan American Silver is currently generating about -0.1 per unit of volatility. If you would invest  2,543  in Pan American Silver on October 23, 2024 and sell it today you would lose (400.00) from holding Pan American Silver or give up 15.73% of portfolio value over 90 days.

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

Hycroft Mining Holding  vs.  Pan American Silver

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 fragile 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.

Pan American Silver

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pan American Silver has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Hycroft Mining and Pan American

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

The idea behind Hycroft Mining Holding and Pan American Silver 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.