Correlation Between Capitan Mining and Brixton Metals
Can any of the company-specific risk be diversified away by investing in both Capitan Mining and Brixton Metals 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 Capitan Mining and Brixton Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capitan Mining and Brixton Metals, you can compare the effects of market volatilities on Capitan Mining and Brixton Metals 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 Capitan Mining with a short position of Brixton Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capitan Mining and Brixton Metals.
Diversification Opportunities for Capitan Mining and Brixton Metals
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Capitan and Brixton is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Capitan Mining and Brixton Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brixton Metals and Capitan Mining 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 Capitan Mining are associated (or correlated) with Brixton Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brixton Metals has no effect on the direction of Capitan Mining i.e., Capitan Mining and Brixton Metals go up and down completely randomly.
Pair Corralation between Capitan Mining and Brixton Metals
Assuming the 90 days horizon Capitan Mining is expected to generate 1.89 times more return on investment than Brixton Metals. However, Capitan Mining is 1.89 times more volatile than Brixton Metals. It trades about 0.15 of its potential returns per unit of risk. Brixton Metals is currently generating about -0.08 per unit of risk. If you would invest 11.00 in Capitan Mining on November 2, 2024 and sell it today you would earn a total of 16.00 from holding Capitan Mining or generate 145.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.04% |
| Values | Daily Returns |
Capitan Mining vs. Brixton Metals
Performance |
| Timeline |
| Capitan Mining |
| Brixton Metals |
Capitan Mining and Brixton Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capitan Mining and Brixton Metals
The main advantage of trading using opposite Capitan Mining and Brixton Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capitan Mining position performs unexpectedly, Brixton Metals 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 Brixton Metals will offset losses from the drop in Brixton Metals' long position.| Capitan Mining vs. Cartier Iron Corp | Capitan Mining vs. Alien Metals | Capitan Mining vs. Arctic Star Exploration | Capitan Mining vs. Denarius Silver Corp |
| Brixton Metals vs. Cartier Iron Corp | Brixton Metals vs. Condor Resources | Brixton Metals vs. Monumental Minerals Corp | Brixton Metals vs. Western Alaska Minerals |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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