Correlation Between Vista Gold and Solitario Exploration

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

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

Diversification Opportunities for Vista Gold and Solitario Exploration

0.01

Correlation Coefficient

Vista Gold  Solitario Exploration

Significant diversification

The 3 months correlation between Vista and Solitario is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Vista Gold and Solitario Exploration Royalty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solitario Exploration and Vista Gold 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 Vista Gold 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 Vista Gold i.e., Vista Gold and Solitario Exploration go up and down completely randomly.

Pair Corralation between Vista Gold and Solitario Exploration

Considering the 90-day investment horizon Vista Gold is expected to generate 1.17 times more return on investment than Solitario Exploration. However, Vista Gold is 1.17 times more volatile than Solitario Exploration Royalty. It trades about 0.11 of its potential returns per unit of risk. Solitario Exploration Royalty is currently generating about -0.02 per unit of risk. If you would invest  56.00  in Vista Gold on January 7, 2025 and sell it today you would earn a total of  14.00  from holding Vista Gold or generate 25.0% return on investment over 90 days.

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

Vista Gold  vs.  Solitario Exploration Royalty

Vista Gold

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vista Gold are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating technical and fundamental indicators, Vista Gold showed solid returns over the last few months and may actually be approaching a breakup point.

Solitario Exploration

Risk-Adjusted Performance

Very Weak

Over the last 90 days Solitario Exploration Royalty has generated negative risk-adjusted returns adding no value to investors with long positions. 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 Vista Gold and Solitario Exploration

The main advantage of trading using opposite Vista Gold and Solitario Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vista Gold 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 Vista Gold 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.