Correlation Between Copper Mountain and Capstone Copper

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

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

Diversification Opportunities for Copper Mountain and Capstone Copper

0.5

Correlation Coefficient

Copper Mountain  Capstone Copper

Very weak diversification

The 3 months correlation between Copper and Capstone is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Copper Mountain Mining and Capstone Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capstone Copper Corp and Copper Mountain 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 Copper Mountain Mining are associated (or correlated) with Capstone Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capstone Copper Corp has no effect on the direction of Copper Mountain i.e., Copper Mountain and Capstone Copper go up and down completely randomly.

Pair Corralation between Copper Mountain and Capstone Copper

Assuming the 90 days horizon Copper Mountain Mining is expected to under-perform the Capstone Copper. In addition to that, Copper Mountain is 1.25 times more volatile than Capstone Copper Corp. It trades about -0.1 of its total potential returns per unit of risk. Capstone Copper Corp is currently generating about -0.04 per unit of volatility. If you would invest  615.00  in Capstone Copper Corp on December 30, 2024 and sell it today you would lose (73.00) from holding Capstone Copper Corp or give up 11.87% of portfolio value over 90 days.

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

Copper Mountain Mining  vs.  Capstone Copper Corp

Copper Mountain Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days Copper Mountain Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Capstone Copper Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Capstone Copper Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Copper Mountain and Capstone Copper

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

The idea behind Copper Mountain Mining and Capstone 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.

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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.