Correlation Between Pembina Pipeline and Capstone Mining
Can any of the company-specific risk be diversified away by investing in both Pembina Pipeline 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 Pembina Pipeline and Capstone Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pembina Pipeline Corp and Capstone Mining Corp, you can compare the effects of market volatilities on Pembina Pipeline 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 Pembina Pipeline with a short position of Capstone Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pembina Pipeline and Capstone Mining.
Diversification Opportunities for Pembina Pipeline and Capstone Mining
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pembina and Capstone is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Pembina Pipeline 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 Pembina Pipeline 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 Pembina Pipeline 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 Pembina Pipeline i.e., Pembina Pipeline and Capstone Mining go up and down completely randomly.
Pair Corralation between Pembina Pipeline and Capstone Mining
Assuming the 90 days trading horizon Pembina Pipeline is expected to generate 2.1 times less return on investment than Capstone Mining. But when comparing it to its historical volatility, Pembina Pipeline Corp is 3.35 times less risky than Capstone Mining. It trades about 0.06 of its potential returns per unit of risk. Capstone Mining Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 601.00 in Capstone Mining Corp on October 27, 2024 and sell it today you would earn a total of 246.00 from holding Capstone Mining Corp or generate 40.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pembina Pipeline Corp vs. Capstone Mining Corp
Performance |
| Timeline |
| Pembina Pipeline Corp |
| Capstone Mining Corp |
Pembina Pipeline and Capstone Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pembina Pipeline and Capstone Mining
The main advantage of trading using opposite Pembina Pipeline and Capstone Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pembina Pipeline 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.| Pembina Pipeline vs. Quipt Home Medical | Pembina Pipeline vs. Medical Facilities | Pembina Pipeline vs. DIRTT Environmental Solutions | Pembina Pipeline vs. Canlan Ice Sports |
| Capstone Mining vs. NV Gold Corp | Capstone Mining vs. Prosper Gold Corp | Capstone Mining vs. Kesselrun Resources | Capstone Mining vs. iShares Canadian HYBrid |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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