Correlation Between Sibanye Gold and Solaris Resources
Can any of the company-specific risk be diversified away by investing in both Sibanye Gold and Solaris Resources 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 Sibanye Gold and Solaris Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sibanye Gold Ltd and Solaris Resources, you can compare the effects of market volatilities on Sibanye Gold and Solaris Resources 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 Sibanye Gold with a short position of Solaris Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sibanye Gold and Solaris Resources.
Diversification Opportunities for Sibanye Gold and Solaris Resources
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sibanye and Solaris is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Sibanye Gold Ltd and Solaris Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solaris Resources and Sibanye Gold 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 Sibanye Gold Ltd are associated (or correlated) with Solaris Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solaris Resources has no effect on the direction of Sibanye Gold i.e., Sibanye Gold and Solaris Resources go up and down completely randomly.
Pair Corralation between Sibanye Gold and Solaris Resources
Given the investment horizon of 90 days Sibanye Gold Ltd is expected to under-perform the Solaris Resources. But the stock apears to be less risky and, when comparing its historical volatility, Sibanye Gold Ltd is 1.02 times less risky than Solaris Resources. The stock trades about -0.02 of its potential returns per unit of risk. The Solaris Resources is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 450.00 in Solaris Resources on November 9, 2024 and sell it today you would lose (83.00) from holding Solaris Resources or give up 18.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sibanye Gold Ltd vs. Solaris Resources
Performance |
| Timeline |
| Sibanye Gold |
| Solaris Resources |
Sibanye Gold and Solaris Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sibanye Gold and Solaris Resources
The main advantage of trading using opposite Sibanye Gold and Solaris Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sibanye Gold position performs unexpectedly, Solaris Resources 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 Solaris Resources will offset losses from the drop in Solaris Resources' long position.| Sibanye Gold vs. AngloGold Ashanti plc | Sibanye Gold vs. Harmony Gold Mining | Sibanye Gold vs. Eldorado Gold Corp | Sibanye Gold vs. Kinross Gold |
| Solaris Resources vs. Torm PLC Class | Solaris Resources vs. United Airlines Holdings | Solaris Resources vs. 51Talk Online Education | Solaris Resources vs. Mesa Air Group |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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