Correlation Between Converge Technology and Capstone Mining
Can any of the company-specific risk be diversified away by investing in both Converge Technology and Capstone 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 Converge Technology and Capstone Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Converge Technology Solutions and Capstone Mining Corp, you can compare the effects of market volatilities on Converge Technology and Capstone 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 Converge Technology with a short position of Capstone Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Converge Technology and Capstone Mining.
Diversification Opportunities for Converge Technology and Capstone Mining
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Converge and Capstone is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Converge Technology Solutions and Capstone Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capstone Mining Corp and Converge Technology 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 Converge Technology Solutions are associated (or correlated) with Capstone Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capstone Mining Corp has no effect on the direction of Converge Technology i.e., Converge Technology and Capstone Mining go up and down completely randomly.
Pair Corralation between Converge Technology and Capstone Mining
Assuming the 90 days trading horizon Converge Technology is expected to generate 2.36 times less return on investment than Capstone Mining. In addition to that, Converge Technology is 1.1 times more volatile than Capstone Mining Corp. It trades about 0.04 of its total potential returns per unit of risk. Capstone Mining Corp is currently generating about 0.11 per unit of volatility. If you would invest 460.00 in Capstone Mining Corp on August 25, 2024 and sell it today you would earn a total of 544.00 from holding Capstone Mining Corp or generate 118.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Converge Technology Solutions vs. Capstone Mining Corp
Performance |
| Timeline |
| Converge Technology |
| Capstone Mining Corp |
Converge Technology and Capstone Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Converge Technology and Capstone Mining
The main advantage of trading using opposite Converge Technology and Capstone Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Converge Technology position performs unexpectedly, Capstone 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 Capstone Mining will offset losses from the drop in Capstone Mining's long position.| Converge Technology vs. Dye Durham | Converge Technology vs. Docebo Inc | Converge Technology vs. Topicus | Converge Technology vs. goeasy |
| Capstone Mining vs. Wilmington Capital Management | Capstone Mining vs. Metalero Mining Corp | Capstone Mining vs. High Liner Foods | Capstone Mining vs. Lion One Metals |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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