Correlation Between Capstone Mining and Great West
Can any of the company-specific risk be diversified away by investing in both Capstone Mining and Great West 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 Great West 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 Great West Lifeco, you can compare the effects of market volatilities on Capstone Mining and Great West 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 Great West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capstone Mining and Great West.
Diversification Opportunities for Capstone Mining and Great West
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Capstone and Great is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Capstone Mining Corp and Great West Lifeco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Lifeco 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 Great West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Lifeco has no effect on the direction of Capstone Mining i.e., Capstone Mining and Great West go up and down completely randomly.
Pair Corralation between Capstone Mining and Great West
Assuming the 90 days horizon Capstone Mining Corp is expected to generate 5.74 times more return on investment than Great West. However, Capstone Mining is 5.74 times more volatile than Great West Lifeco. It trades about -0.01 of its potential returns per unit of risk. Great West Lifeco is currently generating about -0.24 per unit of risk. If you would invest 973.00 in Capstone Mining Corp on August 28, 2024 and sell it today you would lose (11.00) from holding Capstone Mining Corp or give up 1.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capstone Mining Corp vs. Great West Lifeco
Performance |
| Timeline |
| Capstone Mining Corp |
| Great West Lifeco |
Capstone Mining and Great West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capstone Mining and Great West
The main advantage of trading using opposite Capstone Mining and Great West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capstone Mining position performs unexpectedly, Great West 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 Great West will offset losses from the drop in Great West'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 |
| Great West vs. Perseus Mining | Great West vs. Jamieson Wellness | Great West vs. T2 Metals Corp | Great West vs. Ramp Metals |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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