Correlation Between Capstone Copper and Copperbank Resources

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

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

Diversification Opportunities for Capstone Copper and Copperbank Resources

0.61

Correlation Coefficient

Capstone Copper  Copperbank Resources

Poor diversification

The 3 months correlation between Capstone and Copperbank is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Capstone Copper Corp and Copperbank Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copperbank Resources Corp and Capstone Copper 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 Copper Corp are associated (or correlated) with Copperbank Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copperbank Resources Corp has no effect on the direction of Capstone Copper i.e., Capstone Copper and Copperbank Resources go up and down completely randomly.

Pair Corralation between Capstone Copper and Copperbank Resources

Assuming the 90 days horizon Capstone Copper Corp is expected to under-perform the Copperbank Resources. In addition to that, Capstone Copper is 1.15 times more volatile than Copperbank Resources Corp. It trades about -0.03 of its total potential returns per unit of risk. Copperbank Resources Corp is currently generating about -0.02 per unit of volatility. If you would invest  58.00  in Copperbank Resources Corp on September 22, 2024 and sell it today you would lose (6.00) from holding Copperbank Resources Corp or give up 10.34% of portfolio value over 90 days.

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

Capstone Copper Corp  vs.  Copperbank Resources Corp

Capstone Copper Corp

Risk-Adjusted Performance

0 of 100

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 unfluctuating performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Copperbank Resources Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Copperbank Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's forward-looking signals 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 Capstone Copper and Copperbank Resources

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

The idea behind Capstone Copper Corp and Copperbank Resources 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.