Correlation Between Capitan Mining and Ressources Minieres

Can any of the company-specific risk be diversified away by investing in both Capitan Mining and Ressources Minieres 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 Capitan Mining and Ressources Minieres into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Capitan Mining and Ressources Minieres Radisson, you can compare the effects of market volatilities on Capitan Mining and Ressources Minieres 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 Capitan Mining with a short position of Ressources Minieres. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capitan Mining and Ressources Minieres.

Diversification Opportunities for Capitan Mining and Ressources Minieres

-0.33

Correlation Coefficient

Capitan Mining  Ressources Minieres

Very good diversification

The 3 months correlation between Capitan and Ressources is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Capitan Mining and Ressources Minieres Radisson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ressources Minieres and Capitan Mining 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 Capitan Mining are associated (or correlated) with Ressources Minieres. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ressources Minieres has no effect on the direction of Capitan Mining i.e., Capitan Mining and Ressources Minieres go up and down completely randomly.

Pair Corralation between Capitan Mining and Ressources Minieres

Assuming the 90 days trading horizon Capitan Mining is expected to generate 1.04 times more return on investment than Ressources Minieres. However, Capitan Mining is 1.04 times more volatile than Ressources Minieres Radisson. It trades about 0.2 of its potential returns per unit of risk. Ressources Minieres Radisson is currently generating about 0.08 per unit of risk. If you would invest  14.00  in Capitan Mining on September 21, 2024 and sell it today you would earn a total of  16.00  from holding Capitan Mining or generate 114.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Capitan Mining  vs.  Ressources Minieres Radisson

Capitan Mining

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Capitan Mining are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Capitan Mining showed solid returns over the last few months and may actually be approaching a breakup point.

Ressources Minieres

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ressources Minieres Radisson are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Ressources Minieres showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Capitan Mining and Ressources Minieres

The main advantage of trading using opposite Capitan Mining and Ressources Minieres positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capitan Mining position performs unexpectedly, Ressources Minieres 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 Ressources Minieres will offset losses from the drop in Ressources Minieres' long position.

The idea behind Capitan Mining and Ressources Minieres Radisson pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.