Correlation Between Marimaca Copper and Capstone Mining
Can any of the company-specific risk be diversified away by investing in both Marimaca Copper 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 Marimaca Copper and Capstone Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marimaca Copper Corp and Capstone Mining Corp, you can compare the effects of market volatilities on Marimaca Copper 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 Marimaca Copper with a short position of Capstone Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marimaca Copper and Capstone Mining.
Diversification Opportunities for Marimaca Copper and Capstone Mining
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Marimaca and Capstone is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Marimaca Copper Corp 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 Marimaca Copper 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 Marimaca Copper Corp 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 Marimaca Copper i.e., Marimaca Copper and Capstone Mining go up and down completely randomly.
Pair Corralation between Marimaca Copper and Capstone Mining
Assuming the 90 days trading horizon Marimaca Copper is expected to generate 1.61 times less return on investment than Capstone Mining. But when comparing it to its historical volatility, Marimaca Copper Corp is 1.15 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 0.06 of returns per unit of risk over similar time horizon. If you would invest 494.00 in Capstone Mining Corp on September 14, 2024 and sell it today you would earn a total of 432.00 from holding Capstone Mining Corp or generate 87.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marimaca Copper Corp vs. Capstone Mining Corp
Performance |
| Timeline |
| Marimaca Copper Corp |
| Capstone Mining Corp |
Marimaca Copper and Capstone Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marimaca Copper and Capstone Mining
The main advantage of trading using opposite Marimaca Copper and Capstone Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marimaca Copper 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.| Marimaca Copper vs. Arizona Sonoran Copper | Marimaca Copper vs. World Copper | Marimaca Copper vs. QC Copper and | Marimaca Copper vs. Dore Copper Mining |
| Capstone Mining vs. Arizona Sonoran Copper | Capstone Mining vs. Marimaca Copper Corp | Capstone Mining vs. World Copper | Capstone Mining vs. QC Copper and |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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