Correlation Between Capstone Mining and SPoT Coffee

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

Diversification Opportunities for Capstone Mining and SPoT Coffee

0.0

Correlation Coefficient

Capstone Mining  SPoT Coffee

Pay attention - limited upside

The 3 months correlation between Capstone and SPoT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Capstone Mining Corp and SPoT Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPoT Coffee 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 SPoT Coffee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPoT Coffee has no effect on the direction of Capstone Mining i.e., Capstone Mining and SPoT Coffee go up and down completely randomly.

Pair Corralation between Capstone Mining and SPoT Coffee

If you would invest  859.00  in Capstone Mining Corp on August 31, 2024 and sell it today you would earn a total of  84.00  from holding Capstone Mining Corp or generate 9.78% return on investment over 90 days.

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

Capstone Mining Corp  vs.  SPoT Coffee

Capstone Mining Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Capstone Mining Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Capstone Mining may actually be approaching a critical reversion point that can send shares even higher in December 2024.

SPoT Coffee

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SPoT Coffee has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, SPoT Coffee 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 SPoT Coffee

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

The idea behind Capstone Mining Corp and SPoT Coffee 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..