Correlation Between Capstone Mining and Monument Mining
Can any of the company-specific risk be diversified away by investing in both Capstone Mining and Monument 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 Monument 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 Monument Mining Limited, you can compare the effects of market volatilities on Capstone Mining and Monument 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 Monument Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capstone Mining and Monument Mining.
Diversification Opportunities for Capstone Mining and Monument Mining
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Capstone and Monument is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Capstone Mining Corp and Monument Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monument Mining 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 Monument Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monument Mining has no effect on the direction of Capstone Mining i.e., Capstone Mining and Monument Mining go up and down completely randomly.
Pair Corralation between Capstone Mining and Monument Mining
Assuming the 90 days horizon Capstone Mining is expected to generate 2.27 times less return on investment than Monument Mining. But when comparing it to its historical volatility, Capstone Mining Corp is 1.67 times less risky than Monument Mining. It trades about 0.06 of its potential returns per unit of risk. Monument Mining Limited is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 9.00 in Monument Mining Limited on August 31, 2024 and sell it today you would earn a total of 17.00 from holding Monument Mining Limited or generate 188.89% 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. Monument Mining Limited
Performance |
| Timeline |
| Capstone Mining Corp |
| Monument Mining |
Capstone Mining and Monument Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capstone Mining and Monument Mining
The main advantage of trading using opposite Capstone Mining and Monument Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capstone Mining position performs unexpectedly, Monument 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 Monument Mining will offset losses from the drop in Monument Mining's long position.| Capstone Mining vs. Solar Alliance Energy | Capstone Mining vs. Global X Active | Capstone Mining vs. Financial 15 Split | Capstone Mining vs. Rubicon Organics |
| Monument Mining vs. Solar Alliance Energy | Monument Mining vs. Global X Active | Monument Mining vs. Financial 15 Split | Monument Mining vs. Rubicon Organics |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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