Correlation Between Solaris Resources and Metalla Royalty

Can any of the company-specific risk be diversified away by investing in both Solaris Resources and Metalla Royalty 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 Solaris Resources and Metalla Royalty into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Solaris Resources and Metalla Royalty

-0.79

Correlation Coefficient

Solaris Resources  Metalla Royalty

Pay attention - limited upside

The 3 months correlation between Solaris and Metalla is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Solaris Resources and Metalla Royalty Streaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metalla Royalty Streaming and Solaris Resources 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 Solaris Resources are associated (or correlated) with Metalla Royalty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metalla Royalty Streaming has no effect on the direction of Solaris Resources i.e., Solaris Resources and Metalla Royalty go up and down completely randomly.

Pair Corralation between Solaris Resources and Metalla Royalty

Given the investment horizon of 90 days Solaris Resources is expected to generate 1.21 times more return on investment than Metalla Royalty. However, Solaris Resources is 1.21 times more volatile than Metalla Royalty Streaming. It trades about 0.0 of its potential returns per unit of risk. Metalla Royalty Streaming is currently generating about -0.01 per unit of risk. If you would invest  375.00  in Solaris Resources on October 3, 2024 and sell it today you would lose (64.00) from holding Solaris Resources or give up 17.07% of portfolio value over 90 days.

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

Solaris Resources  vs.  Metalla Royalty Streaming

Solaris Resources

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Solaris Resources are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, Solaris Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Metalla Royalty Streaming

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Metalla Royalty Streaming has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Solaris Resources and Metalla Royalty

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

The idea behind Solaris Resources and Metalla Royalty Streaming 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.