Correlation Between GDI Integrated and Solitario Exploration

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

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

Diversification Opportunities for GDI Integrated and Solitario Exploration

-0.43

Correlation Coefficient

GDI Integrated  Solitario Exploration

Very good diversification

The 3 months correlation between GDI and Solitario is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding GDI Integrated and Solitario Exploration Royalty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solitario Exploration and GDI Integrated 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 GDI Integrated are associated (or correlated) with Solitario Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solitario Exploration has no effect on the direction of GDI Integrated i.e., GDI Integrated and Solitario Exploration go up and down completely randomly.

Pair Corralation between GDI Integrated and Solitario Exploration

Assuming the 90 days trading horizon GDI Integrated is expected to generate 0.53 times more return on investment than Solitario Exploration. However, GDI Integrated is 1.89 times less risky than Solitario Exploration. It trades about 0.05 of its potential returns per unit of risk. Solitario Exploration Royalty is currently generating about -0.06 per unit of risk. If you would invest  3,451  in GDI Integrated on September 3, 2024 and sell it today you would earn a total of  170.00  from holding GDI Integrated or generate 4.93% return on investment over 90 days.

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

GDI Integrated  vs.  Solitario Exploration Royalty

GDI Integrated

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GDI Integrated are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, GDI Integrated is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

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. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with GDI Integrated and Solitario Exploration

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

The idea behind GDI Integrated and Solitario Exploration Royalty 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.