Correlation Between Teuton Resources and Hecla Mining

Can any of the company-specific risk be diversified away by investing in both Teuton 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 Teuton 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 Teuton Resources Corp and Hecla Mining, you can compare the effects of market volatilities on Teuton 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 Teuton Resources with a short position of Hecla Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teuton Resources and Hecla Mining.

Diversification Opportunities for Teuton Resources and Hecla Mining

0.23

Correlation Coefficient

Teuton Resources  Hecla Mining

Modest diversification

The 3 months correlation between Teuton and Hecla is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Teuton Resources Corp and Hecla Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hecla Mining and Teuton 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 Teuton Resources Corp 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 Teuton Resources i.e., Teuton Resources and Hecla Mining go up and down completely randomly.

Pair Corralation between Teuton Resources and Hecla Mining

Assuming the 90 days horizon Teuton Resources Corp is expected to under-perform the Hecla Mining. In addition to that, Teuton Resources is 1.04 times more volatile than Hecla Mining. It trades about -0.02 of its total potential returns per unit of risk. Hecla Mining is currently generating about 0.11 per unit of volatility. 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

Teuton Resources Corp  vs.  Hecla Mining

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.

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.

Pair Trading with Teuton Resources and Hecla Mining

The main advantage of trading using opposite Teuton Resources and Hecla Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teuton 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 Teuton Resources Corp 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..