Correlation Between Capstone Mining and Slate Grocery

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

Diversification Opportunities for Capstone Mining and Slate Grocery

-0.34

Correlation Coefficient

Capstone Mining  Slate Grocery

Very good diversification

The 3 months correlation between Capstone and Slate is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Capstone Mining Corp and Slate Grocery REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Slate Grocery REIT 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 Slate Grocery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Slate Grocery REIT has no effect on the direction of Capstone Mining i.e., Capstone Mining and Slate Grocery go up and down completely randomly.

Pair Corralation between Capstone Mining and Slate Grocery

Assuming the 90 days horizon Capstone Mining Corp is expected to under-perform the Slate Grocery. In addition to that, Capstone Mining is 2.29 times more volatile than Slate Grocery REIT. It trades about -0.04 of its total potential returns per unit of risk. Slate Grocery REIT is currently generating about 0.04 per unit of volatility. If you would invest  953.00  in Slate Grocery REIT on December 30, 2024 and sell it today you would earn a total of  27.00  from holding Slate Grocery REIT or generate 2.83% 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.  Slate Grocery REIT

Capstone Mining Corp

Risk-Adjusted Performance

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 latest abnormal performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Slate Grocery REIT

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Slate Grocery REIT are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Slate Grocery is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Capstone Mining and Slate Grocery

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

The idea behind Capstone Mining Corp and Slate Grocery REIT 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.