Correlation Between Arctic Star and Capitan Mining
Can any of the company-specific risk be diversified away by investing in both Arctic Star and Capitan 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 Arctic Star and Capitan Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arctic Star Exploration and Capitan Mining, you can compare the effects of market volatilities on Arctic Star and Capitan 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 Arctic Star with a short position of Capitan Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arctic Star and Capitan Mining.
Diversification Opportunities for Arctic Star and Capitan Mining
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Arctic and Capitan is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Arctic Star Exploration and Capitan Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capitan Mining and Arctic Star 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 Arctic Star Exploration are associated (or correlated) with Capitan Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capitan Mining has no effect on the direction of Arctic Star i.e., Arctic Star and Capitan Mining go up and down completely randomly.
Pair Corralation between Arctic Star and Capitan Mining
Assuming the 90 days horizon Arctic Star Exploration is expected to generate 1.94 times more return on investment than Capitan Mining. However, Arctic Star is 1.94 times more volatile than Capitan Mining. It trades about 0.08 of its potential returns per unit of risk. Capitan Mining is currently generating about 0.12 per unit of risk. If you would invest 1.07 in Arctic Star Exploration on January 14, 2025 and sell it today you would earn a total of 0.73 from holding Arctic Star Exploration or generate 68.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 91.52% |
| Values | Daily Returns |
Arctic Star Exploration vs. Capitan Mining
Performance |
| Timeline |
| Arctic Star Exploration |
| Capitan Mining |
Arctic Star and Capitan Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arctic Star and Capitan Mining
The main advantage of trading using opposite Arctic Star and Capitan Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arctic Star position performs unexpectedly, Capitan 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 Capitan Mining will offset losses from the drop in Capitan Mining's long position.| Arctic Star vs. American Sierra Gold | Arctic Star vs. Aurania Resources | Arctic Star vs. Alien Metals | Arctic Star vs. Gold79 Mines |
| Capitan Mining vs. Chesapeake Gold Corp | Capitan Mining vs. Usha Resources | Capitan Mining vs. American Copper Development | Capitan Mining vs. Endeavour Silver 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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