Correlation Between Hycroft Mining and Solaris Resources

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

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

Diversification Opportunities for Hycroft Mining and Solaris Resources

-0.4

Correlation Coefficient

Hycroft Mining  Solaris Resources

Very good diversification

The 3 months correlation between Hycroft and Solaris is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Hycroft Mining Holding and Solaris Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solaris Resources and Hycroft Mining 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 Hycroft Mining Holding are associated (or correlated) with Solaris Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solaris Resources has no effect on the direction of Hycroft Mining i.e., Hycroft Mining and Solaris Resources go up and down completely randomly.

Pair Corralation between Hycroft Mining and Solaris Resources

Assuming the 90 days horizon Hycroft Mining Holding is expected to generate 4.84 times more return on investment than Solaris Resources. However, Hycroft Mining is 4.84 times more volatile than Solaris Resources. It trades about 0.02 of its potential returns per unit of risk. Solaris Resources is currently generating about 0.07 per unit of risk. If you would invest  1.80  in Hycroft Mining Holding on May 3, 2025 and sell it today you would lose (0.93) from holding Hycroft Mining Holding or give up 51.67% of portfolio value over 90 days.

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

Hycroft Mining Holding  vs.  Solaris Resources

Hycroft Mining Holding

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hycroft Mining Holding are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal fundamental indicators, Hycroft Mining disclosed solid returns over the last few months and may actually be approaching a breakup point.

Solaris Resources

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Solaris Resources are ranked lower than 5 (%) 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.

Pair Trading with Hycroft Mining and Solaris Resources

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

The idea behind Hycroft Mining Holding and Solaris Resources 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.

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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.