Correlation Between Vale SA and Hecla Mining
Can any of the company-specific risk be diversified away by investing in both Vale SA 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 Vale SA and Hecla Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vale SA ADR and Hecla Mining, you can compare the effects of market volatilities on Vale SA 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 Vale SA with a short position of Hecla Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vale SA and Hecla Mining.
Diversification Opportunities for Vale SA and Hecla Mining
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vale and Hecla is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Vale SA ADR and Hecla Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hecla Mining and Vale SA 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 Vale SA ADR 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 Vale SA i.e., Vale SA and Hecla Mining go up and down completely randomly.
Pair Corralation between Vale SA and Hecla Mining
Given the investment horizon of 90 days Vale SA is expected to generate 3.26 times less return on investment than Hecla Mining. But when comparing it to its historical volatility, Vale SA ADR is 1.92 times less risky than Hecla Mining. It trades about 0.11 of its potential returns per unit of risk. Hecla Mining is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 622.00 in Hecla Mining on June 9, 2025 and sell it today you would earn a total of 280.00 from holding Hecla Mining or generate 45.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vale SA ADR vs. Hecla Mining
Performance |
| Timeline |
| Vale SA ADR |
| Hecla Mining |
Vale SA and Hecla Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vale SA and Hecla Mining
The main advantage of trading using opposite Vale SA and Hecla Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vale SA 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.| Vale SA vs. BHP Group Limited | Vale SA vs. Lithium Americas Corp | Vale SA vs. MP Materials Corp | Vale SA vs. Rio Tinto ADR |
| Hecla Mining vs. Endeavour Silver Corp | Hecla Mining vs. Fortuna Silver Mines | Hecla Mining vs. New Gold | Hecla Mining vs. Sandstorm Gold Ltd |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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