Correlation Between Aya Gold and Capstone Mining

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Can any of the company-specific risk be diversified away by investing in both Aya Gold 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 Aya Gold and Capstone Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aya Gold Silver and Capstone Mining Corp, you can compare the effects of market volatilities on Aya Gold 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 Aya Gold with a short position of Capstone Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aya Gold and Capstone Mining.

Diversification Opportunities for Aya Gold and Capstone Mining

0.64
  Correlation Coefficient

Poor diversification

The 3 months correlation between Aya and Capstone is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Aya Gold Silver 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 Aya 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 Aya Gold Silver 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 Aya Gold i.e., Aya Gold and Capstone Mining go up and down completely randomly.

Pair Corralation between Aya Gold and Capstone Mining

Assuming the 90 days trading horizon Aya Gold Silver is expected to under-perform the Capstone Mining. In addition to that, Aya Gold is 2.1 times more volatile than Capstone Mining Corp. It trades about -0.24 of its total potential returns per unit of risk. Capstone Mining Corp is currently generating about 0.05 per unit of volatility. If you would invest  983.00  in Capstone Mining Corp on August 25, 2024 and sell it today you would earn a total of  21.00  from holding Capstone Mining Corp or generate 2.14% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy95.65%
ValuesDaily Returns

Aya Gold Silver  vs.  Capstone Mining Corp

 Performance 
       Timeline  
Aya Gold Silver 

Risk-Adjusted Performance

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Strong
Very Weak
Over the last 90 days Aya Gold Silver has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.
Capstone Mining Corp 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Capstone Mining Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Capstone Mining is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Aya Gold and Capstone Mining Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Aya Gold and Capstone Mining

The main advantage of trading using opposite Aya Gold and Capstone Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aya Gold 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.
The idea behind Aya Gold Silver and Capstone Mining Corp 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.

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