Correlation Between SolGold PLC and Mineros SA
Can any of the company-specific risk be diversified away by investing in both SolGold PLC and Mineros SA 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 SolGold PLC and Mineros SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SolGold PLC and Mineros SA, you can compare the effects of market volatilities on SolGold PLC and Mineros SA 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 SolGold PLC with a short position of Mineros SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SolGold PLC and Mineros SA.
Diversification Opportunities for SolGold PLC and Mineros SA
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SolGold and Mineros is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding SolGold PLC and Mineros SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mineros SA and SolGold PLC 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 SolGold PLC are associated (or correlated) with Mineros SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mineros SA has no effect on the direction of SolGold PLC i.e., SolGold PLC and Mineros SA go up and down completely randomly.
Pair Corralation between SolGold PLC and Mineros SA
Assuming the 90 days trading horizon SolGold PLC is expected to under-perform the Mineros SA. But the stock apears to be less risky and, when comparing its historical volatility, SolGold PLC is 1.64 times less risky than Mineros SA. The stock trades about -0.31 of its potential returns per unit of risk. The Mineros SA is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 135.00 in Mineros SA on September 1, 2024 and sell it today you would earn a total of 20.00 from holding Mineros SA or generate 14.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SolGold PLC vs. Mineros SA
Performance |
| Timeline |
| SolGold PLC |
| Mineros SA |
SolGold PLC and Mineros SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SolGold PLC and Mineros SA
The main advantage of trading using opposite SolGold PLC and Mineros SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SolGold PLC position performs unexpectedly, Mineros SA 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 Mineros SA will offset losses from the drop in Mineros SA's long position.| SolGold PLC vs. Lundin Gold | SolGold PLC vs. Trilogy Metals | SolGold PLC vs. Solaris Resources | SolGold PLC vs. Tudor Gold Corp |
| Mineros SA vs. Sailfish Royalty Corp | Mineros SA vs. Signal Gold | Mineros SA vs. Perseus Mining | Mineros SA vs. Automotive Finco 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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