Correlation Between AKITA Drilling and Capstone Mining
Can any of the company-specific risk be diversified away by investing in both AKITA Drilling and Capstone Mining 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 AKITA Drilling and Capstone Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AKITA Drilling and Capstone Mining Corp, you can compare the effects of market volatilities on AKITA Drilling and Capstone Mining 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 AKITA Drilling with a short position of Capstone Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of AKITA Drilling and Capstone Mining.
Diversification Opportunities for AKITA Drilling and Capstone Mining
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AKITA and Capstone is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding AKITA Drilling and Capstone Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capstone Mining Corp and AKITA Drilling 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 AKITA Drilling are associated (or correlated) with Capstone Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capstone Mining Corp has no effect on the direction of AKITA Drilling i.e., AKITA Drilling and Capstone Mining go up and down completely randomly.
Pair Corralation between AKITA Drilling and Capstone Mining
Assuming the 90 days trading horizon AKITA Drilling is expected to under-perform the Capstone Mining. But the stock apears to be less risky and, when comparing its historical volatility, AKITA Drilling is 1.6 times less risky than Capstone Mining. The stock trades about -0.07 of its potential returns per unit of risk. The Capstone Mining Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 963.00 in Capstone Mining Corp on September 1, 2024 and sell it today you would earn a total of 5.00 from holding Capstone Mining Corp or generate 0.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AKITA Drilling vs. Capstone Mining Corp
Performance |
| Timeline |
| AKITA Drilling |
| Capstone Mining Corp |
AKITA Drilling and Capstone Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AKITA Drilling and Capstone Mining
The main advantage of trading using opposite AKITA Drilling and Capstone Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AKITA Drilling position performs unexpectedly, Capstone Mining 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 Capstone Mining will offset losses from the drop in Capstone Mining's long position.| AKITA Drilling vs. Ensign Energy Services | AKITA Drilling vs. Total Energy Services | AKITA Drilling vs. PHX Energy Services | AKITA Drilling vs. Western Energy Services |
| Capstone Mining vs. First Majestic Silver | Capstone Mining vs. Ivanhoe Energy | Capstone Mining vs. Orezone Gold Corp | Capstone Mining vs. Faraday Copper Corp |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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