Correlation Between Auxico Resources and Capella Minerals
Can any of the company-specific risk be diversified away by investing in both Auxico Resources and Capella Minerals 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 Auxico Resources and Capella Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auxico Resources Canada and Capella Minerals Limited, you can compare the effects of market volatilities on Auxico Resources and Capella Minerals 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 Auxico Resources with a short position of Capella Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auxico Resources and Capella Minerals.
Diversification Opportunities for Auxico Resources and Capella Minerals
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Auxico and Capella is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Auxico Resources Canada and Capella Minerals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capella Minerals and Auxico 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 Auxico Resources Canada are associated (or correlated) with Capella Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capella Minerals has no effect on the direction of Auxico Resources i.e., Auxico Resources and Capella Minerals go up and down completely randomly.
Pair Corralation between Auxico Resources and Capella Minerals
Assuming the 90 days horizon Auxico Resources Canada is expected to generate 7.65 times more return on investment than Capella Minerals. However, Auxico Resources is 7.65 times more volatile than Capella Minerals Limited. It trades about 0.08 of its potential returns per unit of risk. Capella Minerals Limited is currently generating about -0.05 per unit of risk. If you would invest 5.00 in Auxico Resources Canada on September 3, 2024 and sell it today you would lose (4.40) from holding Auxico Resources Canada or give up 88.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Auxico Resources Canada vs. Capella Minerals Limited
Performance |
| Timeline |
| Auxico Resources Canada |
| Capella Minerals |
Auxico Resources and Capella Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auxico Resources and Capella Minerals
The main advantage of trading using opposite Auxico Resources and Capella Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auxico Resources position performs unexpectedly, Capella Minerals 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 Capella Minerals will offset losses from the drop in Capella Minerals' long position.| Auxico Resources vs. Cartier Iron Corp | Auxico Resources vs. Arctic Star Exploration | Auxico Resources vs. Capella Minerals Limited | Auxico Resources vs. Denarius Silver Corp |
| Capella Minerals vs. Star Royalties | Capella Minerals vs. Defiance Silver Corp | Capella Minerals vs. Diamond Fields Resources | Capella Minerals vs. GoGold Resources |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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