Correlation Between Capstone Mining and Sherritt International
Can any of the company-specific risk be diversified away by investing in both Capstone Mining and Sherritt International 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 Capstone Mining and Sherritt International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capstone Mining Corp and Sherritt International, you can compare the effects of market volatilities on Capstone Mining and Sherritt International 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 Capstone Mining with a short position of Sherritt International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capstone Mining and Sherritt International.
Diversification Opportunities for Capstone Mining and Sherritt International
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Capstone and Sherritt is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Capstone Mining Corp and Sherritt International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sherritt International and Capstone 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 Capstone Mining Corp are associated (or correlated) with Sherritt International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sherritt International has no effect on the direction of Capstone Mining i.e., Capstone Mining and Sherritt International go up and down completely randomly.
Pair Corralation between Capstone Mining and Sherritt International
Assuming the 90 days horizon Capstone Mining Corp is expected to generate 0.38 times more return on investment than Sherritt International. However, Capstone Mining Corp is 2.67 times less risky than Sherritt International. It trades about 0.58 of its potential returns per unit of risk. Sherritt International is currently generating about 0.12 per unit of risk. If you would invest 780.00 in Capstone Mining Corp on January 19, 2024 and sell it today you would earn a total of 185.00 from holding Capstone Mining Corp or generate 23.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capstone Mining Corp vs. Sherritt International
Performance |
| Timeline |
| Capstone Mining Corp |
| Sherritt International |
Capstone Mining and Sherritt International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capstone Mining and Sherritt International
The main advantage of trading using opposite Capstone Mining and Sherritt International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capstone Mining position performs unexpectedly, Sherritt International 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 Sherritt International will offset losses from the drop in Sherritt International's long position.| Capstone Mining vs. Ninepoint Diversified Bond | Capstone Mining vs. Economic Investment Trust | Capstone Mining vs. KR Investment | Capstone Mining vs. Cogeco Communications |
| Sherritt International vs. HudBay Minerals | Sherritt International vs. Lundin Mining | Sherritt International vs. First Quantum Minerals | Sherritt International vs. Ivanhoe Mines |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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