Correlation Between Ivanhoe Energy and Solitario Exploration

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

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

Diversification Opportunities for Ivanhoe Energy and Solitario Exploration

-0.5

Correlation Coefficient

Ivanhoe Energy  Solitario Exploration

Very good diversification

The 3 months correlation between Ivanhoe and Solitario is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and Solitario Exploration Royalty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solitario Exploration and Ivanhoe Energy 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 Ivanhoe Energy 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 Ivanhoe Energy i.e., Ivanhoe Energy and Solitario Exploration go up and down completely randomly.

Pair Corralation between Ivanhoe Energy and Solitario Exploration

Assuming the 90 days horizon Ivanhoe Energy is expected to generate 0.94 times more return on investment than Solitario Exploration. However, Ivanhoe Energy is 1.07 times less risky than Solitario Exploration. It trades about 0.13 of its potential returns per unit of risk. Solitario Exploration Royalty is currently generating about -0.04 per unit of risk. If you would invest  819.00  in Ivanhoe Energy on December 31, 2024 and sell it today you would earn a total of  88.00  from holding Ivanhoe Energy or generate 10.74% return on investment over 90 days.

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

Ivanhoe Energy  vs.  Solitario Exploration Royalty

Ivanhoe Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ivanhoe Energy 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 May 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Solitario Exploration

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Solitario Exploration Royalty are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Solitario Exploration may actually be approaching a critical reversion point that can send shares even higher in May 2025.

Pair Trading with Ivanhoe Energy and Solitario Exploration

The main advantage of trading using opposite Ivanhoe Energy and Solitario Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Energy 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 Ivanhoe Energy 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.