Correlation Between El Capitan and Compania Mina

By analyzing existing cross correlation between El Capitan Prec and Compania Mina Buenaventura, you can compare the effects of market volatilities on El Capitan and Compania Mina 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 El Capitan with a short position of Compania Mina. Check out your portfolio center. Please also check ongoing floating volatility patterns of El Capitan and Compania Mina.

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

Diversification Opportunities for El Capitan and Compania Mina

-0.21
  Correlation Coefficient
El Capitan Prec
Compania Mina Buenav

Very good diversification

The 3 months correlation between El Capitan and Compania is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding El Capitan Prec and Compania Mina Buenaventura in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Compania Mina Buenav and El Capitan 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 El Capitan Prec are associated (or correlated) with Compania Mina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compania Mina Buenav has no effect on the direction of El Capitan i.e., El Capitan and Compania Mina go up and down completely randomly.

Pair Corralation between El Capitan and Compania Mina

Given the investment horizon of 90 days El Capitan Prec is expected to under-perform the Compania Mina. In addition to that, El Capitan is 3.27 times more volatile than Compania Mina Buenaventura. It trades about -0.01 of its total potential returns per unit of risk. Compania Mina Buenaventura is currently generating about -0.02 per unit of volatility. If you would invest  1,485  in Compania Mina Buenaventura on September 8, 2021 and sell it today you would lose (734.00)  from holding Compania Mina Buenaventura or give up 49.43% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy99.8%
ValuesDaily Returns

El Capitan Prec  vs.  Compania Mina Buenaventura

 Performance (%) 
      Timeline 
El Capitan Prec 
El Capitan Performance
0 of 100
Over the last 90 days El Capitan Prec has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2022. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

El Capitan Price Channel

Compania Mina Buenav 
Compania Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Compania Mina Buenaventura are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Compania Mina may actually be approaching a critical reversion point that can send shares even higher in January 2022.

Compania Price Channel

El Capitan and Compania Mina Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with El Capitan and Compania Mina

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

El Capitan Prec

Pair trading matchups for El Capitan

The idea behind El Capitan Prec and Compania Mina Buenaventura 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.
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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