Correlation Between Solaris Resources and Hecla Mining

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

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

Diversification Opportunities for Solaris Resources and Hecla Mining

-0.67

Correlation Coefficient

Solaris Resources  Hecla Mining

Excellent diversification

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

Pair Corralation between Solaris Resources and Hecla Mining

Given the investment horizon of 90 days Solaris Resources is expected to generate 1.29 times more return on investment than Hecla Mining. However, Solaris Resources is 1.29 times more volatile than Hecla Mining. It trades about 0.05 of its potential returns per unit of risk. Hecla Mining is currently generating about 0.02 per unit of risk. If you would invest  267.00  in Solaris Resources on September 30, 2024 and sell it today you would earn a total of  51.00  from holding Solaris Resources or generate 19.1% return on investment over 90 days.

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

Solaris Resources  vs.  Hecla Mining

Solaris Resources

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Solaris Resources are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, Solaris Resources reported solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Solaris Resources and Hecla Mining

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

The idea behind Solaris Resources and Hecla Mining 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 Transaction History module to view history of all your transactions and understand their impact on performance.