Correlation Between Capstone Mining and Globex Mining
Can any of the company-specific risk be diversified away by investing in both Capstone Mining and Globex Mining 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 Globex Mining 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 Globex Mining Enterprises, you can compare the effects of market volatilities on Capstone Mining and Globex Mining 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 Globex Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capstone Mining and Globex Mining.
Diversification Opportunities for Capstone Mining and Globex Mining
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Capstone and Globex is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Capstone Mining Corp and Globex Mining Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globex Mining Enterprises 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 Globex Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globex Mining Enterprises has no effect on the direction of Capstone Mining i.e., Capstone Mining and Globex Mining go up and down completely randomly.
Pair Corralation between Capstone Mining and Globex Mining
Assuming the 90 days horizon Capstone Mining Corp is expected to generate 1.24 times more return on investment than Globex Mining. However, Capstone Mining is 1.24 times more volatile than Globex Mining Enterprises. It trades about 0.11 of its potential returns per unit of risk. Globex Mining Enterprises is currently generating about 0.06 per unit of risk. If you would invest 460.00 in Capstone Mining Corp on August 25, 2024 and sell it today you would earn a total of 544.00 from holding Capstone Mining Corp or generate 118.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capstone Mining Corp vs. Globex Mining Enterprises
Performance |
| Timeline |
| Capstone Mining Corp |
| Globex Mining Enterprises |
Capstone Mining and Globex Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capstone Mining and Globex Mining
The main advantage of trading using opposite Capstone Mining and Globex Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capstone Mining position performs unexpectedly, Globex Mining 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 Globex Mining will offset losses from the drop in Globex Mining's long position.| Capstone Mining vs. Wilmington Capital Management | Capstone Mining vs. Metalero Mining Corp | Capstone Mining vs. High Liner Foods | Capstone Mining vs. Lion One Metals |
| Globex Mining vs. First Majestic Silver | Globex Mining vs. Ivanhoe Energy | Globex Mining vs. Orezone Gold Corp | Globex Mining vs. Faraday Copper 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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