Correlation Between Solitario Exploration and United States

Can any of the company-specific risk be diversified away by investing in both Solitario Exploration and United States 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 United States 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 United States Antimony, you can compare the effects of market volatilities on Solitario Exploration and United States 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 United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solitario Exploration and United States.

Diversification Opportunities for Solitario Exploration and United States

0.22

Correlation Coefficient

Solitario Exploration  United States

Modest diversification

The 3 months correlation between Solitario and United is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Solitario Exploration Royalty and United States Antimony in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Antimony 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 United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Antimony has no effect on the direction of Solitario Exploration i.e., Solitario Exploration and United States go up and down completely randomly.

Pair Corralation between Solitario Exploration and United States

Considering the 90-day investment horizon Solitario Exploration Royalty is expected to under-perform the United States. But the stock apears to be less risky and, when comparing its historical volatility, Solitario Exploration Royalty is 2.45 times less risky than United States. The stock trades about -0.06 of its potential returns per unit of risk. The United States Antimony is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  61.00  in United States Antimony on September 2, 2024 and sell it today you would earn a total of  15.00  from holding United States Antimony or generate 24.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Solitario Exploration Royalty  vs.  United States Antimony

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 weak 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.

United States Antimony

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in United States Antimony are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting primary indicators, United States showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Solitario Exploration and United States

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

The idea behind Solitario Exploration Royalty and United States Antimony 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.