Correlation Between Capstone Mining and Plaza Retail
Can any of the company-specific risk be diversified away by investing in both Capstone Mining and Plaza Retail 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 Plaza Retail 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 Plaza Retail REIT, you can compare the effects of market volatilities on Capstone Mining and Plaza Retail 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 Plaza Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capstone Mining and Plaza Retail.
Diversification Opportunities for Capstone Mining and Plaza Retail
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Capstone and Plaza is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Capstone Mining Corp and Plaza Retail REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plaza Retail REIT 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 Plaza Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plaza Retail REIT has no effect on the direction of Capstone Mining i.e., Capstone Mining and Plaza Retail go up and down completely randomly.
Pair Corralation between Capstone Mining and Plaza Retail
Assuming the 90 days horizon Capstone Mining Corp is expected to under-perform the Plaza Retail. In addition to that, Capstone Mining is 2.3 times more volatile than Plaza Retail REIT. It trades about -0.08 of its total potential returns per unit of risk. Plaza Retail REIT is currently generating about -0.02 per unit of volatility. If you would invest 362.00 in Plaza Retail REIT on October 12, 2024 and sell it today you would lose (2.00) from holding Plaza Retail REIT or give up 0.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capstone Mining Corp vs. Plaza Retail REIT
Performance |
| Timeline |
| Capstone Mining Corp |
| Plaza Retail REIT |
Capstone Mining and Plaza Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capstone Mining and Plaza Retail
The main advantage of trading using opposite Capstone Mining and Plaza Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capstone Mining position performs unexpectedly, Plaza Retail 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 Plaza Retail will offset losses from the drop in Plaza Retail's long position.| Capstone Mining vs. CNJ Capital Investments | Capstone Mining vs. XXIX Metal Corp | Capstone Mining vs. Sun Peak Metals | Capstone Mining vs. Information Services |
| Plaza Retail vs. Slate Office REIT | Plaza Retail vs. Automotive Properties Real | Plaza Retail vs. BTB Real Estate | Plaza Retail vs. CT Real Estate |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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