Correlation Between IperionX Limited and Solitario Exploration

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

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

Diversification Opportunities for IperionX Limited and Solitario Exploration

-0.14

Correlation Coefficient

IperionX Limited  Solitario Exploration

Good diversification

The 3 months correlation between IperionX and Solitario is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding IperionX Limited American and Solitario Exploration Royalty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solitario Exploration and IperionX Limited 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 IperionX Limited American 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 IperionX Limited i.e., IperionX Limited and Solitario Exploration go up and down completely randomly.

Pair Corralation between IperionX Limited and Solitario Exploration

Considering the 90-day investment horizon IperionX Limited American is expected to under-perform the Solitario Exploration. In addition to that, IperionX Limited is 1.29 times more volatile than Solitario Exploration Royalty. It trades about -0.26 of its total potential returns per unit of risk. Solitario Exploration Royalty is currently generating about 0.02 per unit of volatility. If you would invest  60.00  in Solitario Exploration Royalty on December 30, 2024 and sell it today you would earn a total of  1.00  from holding Solitario Exploration Royalty or generate 1.67% return on investment over 90 days.

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

IperionX Limited American  vs.  Solitario Exploration Royalty

IperionX Limited American

Risk-Adjusted Performance

Very Weak

Over the last 90 days IperionX Limited American has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company 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 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Solitario Exploration is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with IperionX Limited and Solitario Exploration

The main advantage of trading using opposite IperionX Limited and Solitario Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IperionX Limited 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 IperionX Limited American 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.