Correlation Between Kincora Copper and Solitario Exploration

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

By analyzing existing cross correlation between Kincora Copper and Solitario Exploration Royalty, you can compare the effects of market volatilities on Kincora Copper and Solitario Exploration 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 Kincora Copper with a short position of Solitario Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kincora Copper and Solitario Exploration.

Diversification Opportunities for Kincora Copper and Solitario Exploration

0.42

Correlation Coefficient

Kincora Copper  Solitario Exploration

Very weak diversification

The 3 months correlation between Kincora and Solitario is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Kincora Copper and Solitario Exploration Royalty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solitario Exploration and Kincora Copper 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 Kincora Copper are associated (or correlated) with Solitario Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solitario Exploration has no effect on the direction of Kincora Copper i.e., Kincora Copper and Solitario Exploration go up and down completely randomly.

Pair Corralation between Kincora Copper and Solitario Exploration

Assuming the 90 days horizon Kincora Copper is expected to under-perform the Solitario Exploration. In addition to that, Kincora Copper is 2.73 times more volatile than Solitario Exploration Royalty. It trades about -0.06 of its total potential returns per unit of risk. Solitario Exploration Royalty is currently generating about -0.06 per unit of volatility. If you would invest  107.00  in Solitario Exploration Royalty on September 12, 2024 and sell it today you would lose (14.00) from holding Solitario Exploration Royalty or give up 13.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Kincora Copper  vs.  Solitario Exploration Royalty

Kincora Copper

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kincora Copper has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Solitario Exploration

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Solitario Exploration Royalty has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Kincora Copper and Solitario Exploration

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

The idea behind Kincora Copper and Solitario Exploration Royalty 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.