Correlation Between Capstone Mining and CHEVRON CDR
Can any of the company-specific risk be diversified away by investing in both Capstone Mining and CHEVRON CDR 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 Capstone Mining and CHEVRON CDR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capstone Mining Corp and CHEVRON CDR, you can compare the effects of market volatilities on Capstone Mining and CHEVRON CDR 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 Capstone Mining with a short position of CHEVRON CDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capstone Mining and CHEVRON CDR.
Diversification Opportunities for Capstone Mining and CHEVRON CDR
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Capstone and CHEVRON is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Capstone Mining Corp and CHEVRON CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHEVRON CDR and Capstone 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 Capstone Mining Corp are associated (or correlated) with CHEVRON CDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHEVRON CDR has no effect on the direction of Capstone Mining i.e., Capstone Mining and CHEVRON CDR go up and down completely randomly.
Pair Corralation between Capstone Mining and CHEVRON CDR
Assuming the 90 days horizon Capstone Mining Corp is expected to under-perform the CHEVRON CDR. In addition to that, Capstone Mining is 2.4 times more volatile than CHEVRON CDR. It trades about -0.07 of its total potential returns per unit of risk. CHEVRON CDR is currently generating about 0.4 per unit of volatility. If you would invest 1,961 in CHEVRON CDR on August 31, 2024 and sell it today you would earn a total of 205.00 from holding CHEVRON CDR or generate 10.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capstone Mining Corp vs. CHEVRON CDR
Performance |
| Timeline |
| Capstone Mining Corp |
| CHEVRON CDR |
Capstone Mining and CHEVRON CDR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capstone Mining and CHEVRON CDR
The main advantage of trading using opposite Capstone Mining and CHEVRON CDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capstone Mining position performs unexpectedly, CHEVRON CDR 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 CHEVRON CDR will offset losses from the drop in CHEVRON CDR's long position.| Capstone Mining vs. Solar Alliance Energy | Capstone Mining vs. Global X Active | Capstone Mining vs. Financial 15 Split | Capstone Mining vs. Rubicon Organics |
| CHEVRON CDR vs. InPlay Oil Corp | CHEVRON CDR vs. Renoworks Software | CHEVRON CDR vs. Canlan Ice Sports | CHEVRON CDR vs. Capstone Mining 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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