Correlation Between Capstone Mining and Libero Copper

Can any of the company-specific risk be diversified away by investing in both Capstone Mining and Libero 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 Capstone Mining and Libero Copper 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 Libero Copper Corp, you can compare the effects of market volatilities on Capstone Mining and Libero 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 Capstone Mining with a short position of Libero Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capstone Mining and Libero Copper.

Diversification Opportunities for Capstone Mining and Libero Copper

-0.15

Correlation Coefficient

Capstone Mining  Libero Copper

Good diversification

The 3 months correlation between Capstone and Libero is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Capstone Mining Corp and Libero Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Libero Copper Corp 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 Libero Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Libero Copper Corp has no effect on the direction of Capstone Mining i.e., Capstone Mining and Libero Copper go up and down completely randomly.

Pair Corralation between Capstone Mining and Libero Copper

Assuming the 90 days horizon Capstone Mining Corp is expected to generate 0.31 times more return on investment than Libero Copper. However, Capstone Mining Corp is 3.21 times less risky than Libero Copper. It trades about 0.04 of its potential returns per unit of risk. Libero Copper Corp is currently generating about 0.01 per unit of risk. If you would invest  595.00  in Capstone Mining Corp on October 5, 2024 and sell it today you would earn a total of  296.00  from holding Capstone Mining Corp or generate 49.75% return on investment over 90 days.

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

Capstone Mining Corp  vs.  Libero Copper Corp

Capstone Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Capstone Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Libero Copper Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Libero Copper Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Libero Copper showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Capstone Mining and Libero Copper

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

The idea behind Capstone Mining Corp and Libero 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.