Correlation Between First Quantum and Capstone Mining
Can any of the company-specific risk be diversified away by investing in both First Quantum 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 First Quantum and Capstone Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Quantum Minerals and Capstone Mining Corp, you can compare the effects of market volatilities on First Quantum 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 First Quantum with a short position of Capstone Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Quantum and Capstone Mining.
Diversification Opportunities for First Quantum and Capstone Mining
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between First and Capstone is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding First Quantum Minerals 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 First Quantum 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 First Quantum Minerals 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 First Quantum i.e., First Quantum and Capstone Mining go up and down completely randomly.
Pair Corralation between First Quantum and Capstone Mining
Assuming the 90 days horizon First Quantum Minerals is expected to generate 0.99 times more return on investment than Capstone Mining. However, First Quantum Minerals is 1.01 times less risky than Capstone Mining. It trades about -0.04 of its potential returns per unit of risk. Capstone Mining Corp is currently generating about -0.11 per unit of risk. If you would invest 1,893 in First Quantum Minerals on November 3, 2024 and sell it today you would lose (74.00) from holding First Quantum Minerals or give up 3.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Quantum Minerals vs. Capstone Mining Corp
Performance |
| Timeline |
| First Quantum Minerals |
| Capstone Mining Corp |
First Quantum and Capstone Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Quantum and Capstone Mining
The main advantage of trading using opposite First Quantum and Capstone Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Quantum 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.| First Quantum vs. Lundin Mining | First Quantum vs. HudBay Minerals | First Quantum vs. Teck Resources Limited | First Quantum vs. Ivanhoe Mines |
| Capstone Mining vs. Pace Metals | Capstone Mining vs. Nano One Materials | Capstone Mining vs. NeXGold Mining Corp | Capstone Mining vs. Andean Precious 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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