Correlation Between Stellar and Hecla Mining

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

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

Diversification Opportunities for Stellar and Hecla Mining

-0.74

Correlation Coefficient

Stellar  Hecla Mining

Pay attention - limited upside

The 3 months correlation between Stellar and Hecla is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Stellar and Hecla Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hecla Mining and Stellar 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 Stellar 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 Stellar i.e., Stellar and Hecla Mining go up and down completely randomly.

Pair Corralation between Stellar and Hecla Mining

Assuming the 90 days trading horizon Stellar is expected to generate 4.47 times more return on investment than Hecla Mining. However, Stellar is 4.47 times more volatile than Hecla Mining Co. It trades about 0.26 of its potential returns per unit of risk. Hecla Mining Co is currently generating about -0.02 per unit of risk. If you would invest  13.00  in Stellar on October 10, 2024 and sell it today you would earn a total of  29.00  from holding Stellar or generate 223.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	97.62%
Values	Daily Returns

Stellar  vs.  Hecla Mining Co

Stellar

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Stellar are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady primary indicators, Stellar exhibited 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 Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady 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 Stellar and Hecla Mining

The main advantage of trading using opposite Stellar and Hecla Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stellar 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 Stellar and Hecla Mining Co 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.