Correlation Between Capstone Mining and Quorum Information

Can any of the company-specific risk be diversified away by investing in both Capstone Mining and Quorum Information 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 Quorum Information 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 Quorum Information Technologies, you can compare the effects of market volatilities on Capstone Mining and Quorum Information 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 Quorum Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capstone Mining and Quorum Information.

Diversification Opportunities for Capstone Mining and Quorum Information

-0.74

Correlation Coefficient

Capstone Mining  Quorum Information

Pay attention - limited upside

The 3 months correlation between Capstone and Quorum is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Capstone Mining Corp and Quorum Information Technologie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quorum Information 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 Quorum Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quorum Information has no effect on the direction of Capstone Mining i.e., Capstone Mining and Quorum Information go up and down completely randomly.

Pair Corralation between Capstone Mining and Quorum Information

Assuming the 90 days horizon Capstone Mining Corp is expected to generate 0.96 times more return on investment than Quorum Information. However, Capstone Mining Corp is 1.05 times less risky than Quorum Information. It trades about 0.08 of its potential returns per unit of risk. Quorum Information Technologies is currently generating about 0.03 per unit of risk. If you would invest  859.00  in Capstone Mining Corp on September 3, 2024 and sell it today you would earn a total of  109.00  from holding Capstone Mining Corp or generate 12.69% return on investment over 90 days.

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

Capstone Mining Corp  vs.  Quorum Information Technologie

Capstone Mining Corp

Risk-Adjusted Performance

6 of 100

Modest

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

Quorum Information

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Quorum Information Technologies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Quorum Information is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Capstone Mining and Quorum Information

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

The idea behind Capstone Mining Corp and Quorum Information Technologies 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..