Correlation Between Capitan Mining and Equity Metals
Can any of the company-specific risk be diversified away by investing in both Capitan Mining and Equity 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 Equity 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 Equity Metals, you can compare the effects of market volatilities on Capitan Mining and Equity 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 Equity Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capitan Mining and Equity Metals.
Diversification Opportunities for Capitan Mining and Equity Metals
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Capitan and Equity is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Capitan Mining and Equity Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equity 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 Equity Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equity Metals has no effect on the direction of Capitan Mining i.e., Capitan Mining and Equity Metals go up and down completely randomly.
Pair Corralation between Capitan Mining and Equity Metals
Assuming the 90 days horizon Capitan Mining is expected to generate 1.32 times more return on investment than Equity Metals. However, Capitan Mining is 1.32 times more volatile than Equity Metals. It trades about 0.05 of its potential returns per unit of risk. Equity Metals is currently generating about 0.04 per unit of risk. If you would invest 25.00 in Capitan Mining on September 4, 2024 and sell it today you would earn a total of 0.00 from holding Capitan Mining or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capitan Mining vs. Equity Metals
Performance |
| Timeline |
| Capitan Mining |
| Equity Metals |
Capitan Mining and Equity Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capitan Mining and Equity Metals
The main advantage of trading using opposite Capitan Mining and Equity Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capitan Mining position performs unexpectedly, Equity 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 Equity Metals will offset losses from the drop in Equity 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 |
| Equity Metals vs. Sierra Madre Gold | Equity Metals vs. Silver Wolf Exploration | Equity Metals vs. Western Alaska Minerals | Equity Metals vs. Summa 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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