Correlation Between Solitario Exploration and Platinum Group
Can any of the company-specific risk be diversified away by investing in both Solitario Exploration and Platinum Group 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 Platinum Group 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 Platinum Group Metals, you can compare the effects of market volatilities on Solitario Exploration and Platinum Group 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 Platinum Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solitario Exploration and Platinum Group.
Diversification Opportunities for Solitario Exploration and Platinum Group
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Solitario and Platinum is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Solitario Exploration Royalty and Platinum Group Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Group 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 Platinum Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Group Metals has no effect on the direction of Solitario Exploration i.e., Solitario Exploration and Platinum Group go up and down completely randomly.
Pair Corralation between Solitario Exploration and Platinum Group
Assuming the 90 days trading horizon Solitario Exploration Royalty is expected to under-perform the Platinum Group. But the stock apears to be less risky and, when comparing its historical volatility, Solitario Exploration Royalty is 1.51 times less risky than Platinum Group. The stock trades about -0.08 of its potential returns per unit of risk. The Platinum Group Metals is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 183.00 in Platinum Group Metals on January 24, 2025 and sell it today you would lose (15.00) from holding Platinum Group Metals or give up 8.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solitario Exploration Royalty vs. Platinum Group Metals
Performance |
| Timeline |
| Solitario Exploration |
| Platinum Group Metals |
Solitario Exploration and Platinum Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solitario Exploration and Platinum Group
The main advantage of trading using opposite Solitario Exploration and Platinum Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solitario Exploration position performs unexpectedly, Platinum Group 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 Platinum Group will offset losses from the drop in Platinum Group's long position.| Solitario Exploration vs. Northcliff Resources | Solitario Exploration vs. Lupaka Gold Corp | Solitario Exploration vs. Thunderstruck Resources | Solitario Exploration vs. Asiabasemetals |
| Platinum Group vs. Goliath Resources | Platinum Group vs. Kenorland Minerals | Platinum Group vs. Cassiar Gold Corp | Platinum Group vs. Eskay Mining Corp |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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