Correlation Between Capstone Mining and Converge Technology
Can any of the company-specific risk be diversified away by investing in both Capstone Mining and Converge Technology 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 Converge Technology 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 Converge Technology Solutions, you can compare the effects of market volatilities on Capstone Mining and Converge Technology 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 Converge Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capstone Mining and Converge Technology.
Diversification Opportunities for Capstone Mining and Converge Technology
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Capstone and Converge is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Capstone Mining Corp and Converge Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Converge Technology 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 Converge Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Converge Technology has no effect on the direction of Capstone Mining i.e., Capstone Mining and Converge Technology go up and down completely randomly.
Pair Corralation between Capstone Mining and Converge Technology
Assuming the 90 days horizon Capstone Mining Corp is expected to generate 0.8 times more return on investment than Converge Technology. However, Capstone Mining Corp is 1.25 times less risky than Converge Technology. It trades about 0.05 of its potential returns per unit of risk. Converge Technology Solutions is currently generating about 0.01 per unit of risk. If you would invest 669.00 in Capstone Mining Corp on August 29, 2024 and sell it today you would earn a total of 293.00 from holding Capstone Mining Corp or generate 43.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capstone Mining Corp vs. Converge Technology Solutions
Performance |
| Timeline |
| Capstone Mining Corp |
| Converge Technology |
Capstone Mining and Converge Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capstone Mining and Converge Technology
The main advantage of trading using opposite Capstone Mining and Converge Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capstone Mining position performs unexpectedly, Converge Technology 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 Converge Technology will offset losses from the drop in Converge Technology's long position.| Capstone Mining vs. AKITA Drilling | Capstone Mining vs. Maple Peak Investments | Capstone Mining vs. Plaza Retail REIT | Capstone Mining vs. Constellation Software |
| Converge Technology vs. Dye Durham | Converge Technology vs. Docebo Inc | Converge Technology vs. Topicus | Converge Technology vs. goeasy |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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