Correlation Between Solitario Exploration and Trilogy Metals

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

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

Diversification Opportunities for Solitario Exploration and Trilogy Metals

-0.83

Correlation Coefficient

Solitario Exploration  Trilogy Metals

Pay attention - limited upside

The 3 months correlation between Solitario and Trilogy is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Solitario Exploration Royalty and Trilogy Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trilogy Metals and Solitario Exploration 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 Solitario Exploration Royalty are associated (or correlated) with Trilogy Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trilogy Metals has no effect on the direction of Solitario Exploration i.e., Solitario Exploration and Trilogy Metals go up and down completely randomly.

Pair Corralation between Solitario Exploration and Trilogy Metals

Considering the 90-day investment horizon Solitario Exploration Royalty is expected to generate 0.73 times more return on investment than Trilogy Metals. However, Solitario Exploration Royalty is 1.36 times less risky than Trilogy Metals. It trades about 0.02 of its potential returns per unit of risk. Trilogy Metals is currently generating about -0.13 per unit of risk. If you would invest  61.00  in Solitario Exploration Royalty on September 24, 2024 and sell it today you would earn a total of  0.00  from holding Solitario Exploration Royalty or generate 0.0% return on investment over 90 days.

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

Solitario Exploration Royalty  vs.  Trilogy Metals

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. Despite unsteady performance in the last few months, the Stock's basic 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.

Trilogy Metals

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Trilogy Metals are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady primary indicators, Trilogy Metals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Solitario Exploration and Trilogy Metals

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

The idea behind Solitario Exploration Royalty and Trilogy Metals 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.