Correlation Between Capstone Mining and Western Investment
Can any of the company-specific risk be diversified away by investing in both Capstone Mining and Western Investment 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 Western Investment 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 Western Investment, you can compare the effects of market volatilities on Capstone Mining and Western Investment 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 Western Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capstone Mining and Western Investment.
Diversification Opportunities for Capstone Mining and Western Investment
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Capstone and Western is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Capstone Mining Corp and Western Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Investment 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 Western Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Investment has no effect on the direction of Capstone Mining i.e., Capstone Mining and Western Investment go up and down completely randomly.
Pair Corralation between Capstone Mining and Western Investment
Assuming the 90 days horizon Capstone Mining Corp is expected to generate 1.18 times more return on investment than Western Investment. However, Capstone Mining is 1.18 times more volatile than Western Investment. It trades about 0.14 of its potential returns per unit of risk. Western Investment is currently generating about 0.01 per unit of risk. If you would invest 926.00 in Capstone Mining Corp on August 17, 2025 and sell it today you would earn a total of 291.00 from holding Capstone Mining Corp or generate 31.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capstone Mining Corp vs. Western Investment
Performance |
| Timeline |
| Capstone Mining Corp |
| Western Investment |
Capstone Mining and Western Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capstone Mining and Western Investment
The main advantage of trading using opposite Capstone Mining and Western Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capstone Mining position performs unexpectedly, Western Investment 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 Western Investment will offset losses from the drop in Western Investment's long position.| Capstone Mining vs. HudBay Minerals | Capstone Mining vs. China Gold International | Capstone Mining vs. IAMGold | Capstone Mining vs. New Gold |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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