Correlation Between Capella Minerals and Chakana Copper

Can any of the company-specific risk be diversified away by investing in both Capella Minerals and Chakana Copper 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 Capella Minerals and Chakana Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Capella Minerals and Chakana Copper Corp, you can compare the effects of market volatilities on Capella Minerals and Chakana Copper 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 Capella Minerals with a short position of Chakana Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capella Minerals and Chakana Copper.

Diversification Opportunities for Capella Minerals and Chakana Copper

0.05

Correlation Coefficient

Capella Minerals  Chakana Copper

Significant diversification

The 3 months correlation between Capella and Chakana is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Capella Minerals and Chakana Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chakana Copper Corp and Capella Minerals 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 Capella Minerals are associated (or correlated) with Chakana Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chakana Copper Corp has no effect on the direction of Capella Minerals i.e., Capella Minerals and Chakana Copper go up and down completely randomly.

Pair Corralation between Capella Minerals and Chakana Copper

Assuming the 90 days trading horizon Capella Minerals is expected to generate 6.06 times more return on investment than Chakana Copper. However, Capella Minerals is 6.06 times more volatile than Chakana Copper Corp. It trades about 0.12 of its potential returns per unit of risk. Chakana Copper Corp is currently generating about -0.04 per unit of risk. If you would invest  12.00  in Capella Minerals on September 27, 2024 and sell it today you would lose (6.00) from holding Capella Minerals or give up 50.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Capella Minerals  vs.  Chakana Copper Corp

Capella Minerals

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Capella Minerals are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal forward indicators, Capella Minerals showed solid returns over the last few months and may actually be approaching a breakup point.

Chakana Copper Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chakana Copper Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Capella Minerals and Chakana Copper

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

The idea behind Capella Minerals and Chakana Copper Corp 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 the Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.