Correlation Between Fresnillo PLC and Capitan Mining
Can any of the company-specific risk be diversified away by investing in both Fresnillo PLC and Capitan 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 Fresnillo PLC and Capitan Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fresnillo PLC and Capitan Mining, you can compare the effects of market volatilities on Fresnillo PLC and Capitan 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 Fresnillo PLC with a short position of Capitan Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresnillo PLC and Capitan Mining.
Diversification Opportunities for Fresnillo PLC and Capitan Mining
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fresnillo and Capitan is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Fresnillo PLC and Capitan Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capitan Mining and Fresnillo PLC 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 Fresnillo PLC are associated (or correlated) with Capitan Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capitan Mining has no effect on the direction of Fresnillo PLC i.e., Fresnillo PLC and Capitan Mining go up and down completely randomly.
Pair Corralation between Fresnillo PLC and Capitan Mining
Assuming the 90 days horizon Fresnillo PLC is expected to under-perform the Capitan Mining. But the pink sheet apears to be less risky and, when comparing its historical volatility, Fresnillo PLC is 3.62 times less risky than Capitan Mining. The pink sheet trades about 0.0 of its potential returns per unit of risk. The Capitan Mining is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 16.00 in Capitan Mining on August 30, 2024 and sell it today you would earn a total of 9.00 from holding Capitan Mining or generate 56.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.19% |
| Values | Daily Returns |
Fresnillo PLC vs. Capitan Mining
Performance |
| Timeline |
| Fresnillo PLC |
| Capitan Mining |
Fresnillo PLC and Capitan Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresnillo PLC and Capitan Mining
The main advantage of trading using opposite Fresnillo PLC and Capitan Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresnillo PLC position performs unexpectedly, Capitan 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 Capitan Mining will offset losses from the drop in Capitan Mining's long position.| Fresnillo PLC vs. Impala Platinum Holdings | Fresnillo PLC vs. Anglo American Platinum | Fresnillo PLC vs. Platinum Group Metals | Fresnillo PLC vs. AbraSilver Resource Corp |
| Capitan Mining vs. Cartier Iron Corp | Capitan Mining vs. Alien Metals | Capitan Mining vs. Arctic Star Exploration | Capitan Mining vs. Denarius Silver 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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