Correlation Between Capstone Mining and NIKE
Can any of the company-specific risk be diversified away by investing in both Capstone Mining and NIKE 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 NIKE 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 NIKE Inc CDR, you can compare the effects of market volatilities on Capstone Mining and NIKE 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 NIKE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capstone Mining and NIKE.
Diversification Opportunities for Capstone Mining and NIKE
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Capstone and NIKE is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Capstone Mining Corp and NIKE Inc CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIKE Inc CDR 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 NIKE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIKE Inc CDR has no effect on the direction of Capstone Mining i.e., Capstone Mining and NIKE go up and down completely randomly.
Pair Corralation between Capstone Mining and NIKE
Assuming the 90 days horizon Capstone Mining Corp is expected to generate 1.27 times more return on investment than NIKE. However, Capstone Mining is 1.27 times more volatile than NIKE Inc CDR. It trades about 0.02 of its potential returns per unit of risk. NIKE Inc CDR is currently generating about -0.05 per unit of risk. If you would invest 933.00 in Capstone Mining Corp on September 1, 2024 and sell it today you would earn a total of 35.00 from holding Capstone Mining Corp or generate 3.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Capstone Mining Corp vs. NIKE Inc CDR
Performance |
| Timeline |
| Capstone Mining Corp |
| NIKE Inc CDR |
Capstone Mining and NIKE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capstone Mining and NIKE
The main advantage of trading using opposite Capstone Mining and NIKE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capstone Mining position performs unexpectedly, NIKE 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 NIKE will offset losses from the drop in NIKE's long position.| Capstone Mining vs. First Majestic Silver | Capstone Mining vs. Ivanhoe Energy | Capstone Mining vs. Orezone Gold Corp | Capstone Mining vs. Faraday Copper Corp |
| NIKE vs. Oculus VisionTech | NIKE vs. Northstar Clean Technologies | NIKE vs. Exco Technologies Limited | NIKE vs. Bip Investment 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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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