Correlation Between Capstone Mining and Waseco Resources
Can any of the company-specific risk be diversified away by investing in both Capstone Mining and Waseco Resources 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 Waseco Resources 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 Waseco Resources, you can compare the effects of market volatilities on Capstone Mining and Waseco Resources 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 Waseco Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capstone Mining and Waseco Resources.
Diversification Opportunities for Capstone Mining and Waseco Resources
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Capstone and Waseco is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Capstone Mining Corp and Waseco Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waseco Resources 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 Waseco Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waseco Resources has no effect on the direction of Capstone Mining i.e., Capstone Mining and Waseco Resources go up and down completely randomly.
Pair Corralation between Capstone Mining and Waseco Resources
Assuming the 90 days horizon Capstone Mining Corp is expected to under-perform the Waseco Resources. But the stock apears to be less risky and, when comparing its historical volatility, Capstone Mining Corp is 5.8 times less risky than Waseco Resources. The stock trades about -0.11 of its potential returns per unit of risk. The Waseco Resources is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2.00 in Waseco Resources on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Waseco Resources or generate 0.0% 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. Waseco Resources
Performance |
| Timeline |
| Capstone Mining Corp |
| Waseco Resources |
Capstone Mining and Waseco Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capstone Mining and Waseco Resources
The main advantage of trading using opposite Capstone Mining and Waseco Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capstone Mining position performs unexpectedly, Waseco Resources 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 Waseco Resources will offset losses from the drop in Waseco Resources' long position.| Capstone Mining vs. Gfl Environmental Holdings | Capstone Mining vs. Metalero Mining Corp | Capstone Mining vs. NorthWest Healthcare Properties | Capstone Mining vs. Ramp Metals |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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