Correlation Between Capstone Mining and Dream Office
Can any of the company-specific risk be diversified away by investing in both Capstone Mining and Dream Office 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 Dream Office 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 Dream Office Real, you can compare the effects of market volatilities on Capstone Mining and Dream Office 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 Dream Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capstone Mining and Dream Office.
Diversification Opportunities for Capstone Mining and Dream Office
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Capstone and Dream is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Capstone Mining Corp and Dream Office Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dream Office Real 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 Dream Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dream Office Real has no effect on the direction of Capstone Mining i.e., Capstone Mining and Dream Office go up and down completely randomly.
Pair Corralation between Capstone Mining and Dream Office
Assuming the 90 days horizon Capstone Mining Corp is expected to generate 1.58 times more return on investment than Dream Office. However, Capstone Mining is 1.58 times more volatile than Dream Office Real. It trades about 0.04 of its potential returns per unit of risk. Dream Office Real is currently generating about 0.02 per unit of risk. If you would invest 883.00 in Capstone Mining Corp on September 13, 2024 and sell it today you would earn a total of 77.00 from holding Capstone Mining Corp or generate 8.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capstone Mining Corp vs. Dream Office Real
Performance |
| Timeline |
| Capstone Mining Corp |
| Dream Office Real |
Capstone Mining and Dream Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capstone Mining and Dream Office
The main advantage of trading using opposite Capstone Mining and Dream Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capstone Mining position performs unexpectedly, Dream Office 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 Dream Office will offset losses from the drop in Dream Office's long position.| Capstone Mining vs. Arizona Sonoran Copper | Capstone Mining vs. Marimaca Copper Corp | Capstone Mining vs. World Copper | Capstone Mining vs. QC Copper and |
| Dream Office vs. Canadian Apartment Properties | Dream Office vs. Granite Real Estate | Dream Office vs. Choice Properties Real | Dream Office vs. HR Real Estate |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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