Correlation Between Capstone Mining and Information Services
Can any of the company-specific risk be diversified away by investing in both Capstone Mining and Information Services 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 Information Services 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 Information Services, you can compare the effects of market volatilities on Capstone Mining and Information Services 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 Information Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capstone Mining and Information Services.
Diversification Opportunities for Capstone Mining and Information Services
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Capstone and Information is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Capstone Mining Corp and Information Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Information Services 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 Information Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Information Services has no effect on the direction of Capstone Mining i.e., Capstone Mining and Information Services go up and down completely randomly.
Pair Corralation between Capstone Mining and Information Services
Assuming the 90 days horizon Capstone Mining Corp is expected to generate 1.28 times more return on investment than Information Services. However, Capstone Mining is 1.28 times more volatile than Information Services. It trades about 0.11 of its potential returns per unit of risk. Information Services is currently generating about 0.1 per unit of risk. If you would invest 1,230 in Capstone Mining Corp on November 8, 2025 and sell it today you would earn a total of 263.00 from holding Capstone Mining Corp or generate 21.38% 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. Information Services
Performance |
| Timeline |
| Capstone Mining Corp |
| Information Services |
Capstone Mining and Information Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capstone Mining and Information Services
The main advantage of trading using opposite Capstone Mining and Information Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capstone Mining position performs unexpectedly, Information Services 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 Information Services will offset losses from the drop in Information Services' long position.| Capstone Mining vs. HudBay Minerals | Capstone Mining vs. China Gold International | Capstone Mining vs. IAMGold | Capstone Mining vs. New Gold |
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Information Services as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Information Services' systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Information Services' unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Information Services.
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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