Correlation Between Capstone Mining and NGEx Minerals
Can any of the company-specific risk be diversified away by investing in both Capstone Mining and NGEx Minerals 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 NGEx Minerals 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 NGEx Minerals, you can compare the effects of market volatilities on Capstone Mining and NGEx Minerals 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 NGEx Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capstone Mining and NGEx Minerals.
Diversification Opportunities for Capstone Mining and NGEx Minerals
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Capstone and NGEx is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Capstone Mining Corp and NGEx Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NGEx Minerals 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 NGEx Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NGEx Minerals has no effect on the direction of Capstone Mining i.e., Capstone Mining and NGEx Minerals go up and down completely randomly.
Pair Corralation between Capstone Mining and NGEx Minerals
Assuming the 90 days horizon Capstone Mining Corp is expected to under-perform the NGEx Minerals. In addition to that, Capstone Mining is 1.33 times more volatile than NGEx Minerals. It trades about -0.09 of its total potential returns per unit of risk. NGEx Minerals is currently generating about 0.14 per unit of volatility. If you would invest 1,116 in NGEx Minerals on August 30, 2024 and sell it today you would earn a total of 122.00 from holding NGEx Minerals or generate 10.93% 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. NGEx Minerals
Performance |
| Timeline |
| Capstone Mining Corp |
| NGEx Minerals |
Capstone Mining and NGEx Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capstone Mining and NGEx Minerals
The main advantage of trading using opposite Capstone Mining and NGEx Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capstone Mining position performs unexpectedly, NGEx Minerals 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 NGEx Minerals will offset losses from the drop in NGEx Minerals' long position.| Capstone Mining vs. Laurentian Bank | Capstone Mining vs. Information Services | Capstone Mining vs. Manulife Financial Corp | Capstone Mining vs. Canadian Imperial Bank |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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