Correlation Between Capstone Copper and Dor Copper

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

Diversification Opportunities for Capstone Copper and Dor Copper

-0.32

Correlation Coefficient

Capstone Copper  Dor Copper

Very good diversification

The 3 months correlation between Capstone and Dor is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Capstone Copper Corp and Dor Copper Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dor Copper Mining 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 Dor Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dor Copper Mining has no effect on the direction of Capstone Copper i.e., Capstone Copper and Dor Copper go up and down completely randomly.

Pair Corralation between Capstone Copper and Dor Copper

Assuming the 90 days horizon Capstone Copper Corp is expected to under-perform the Dor Copper. But the otc stock apears to be less risky and, when comparing its historical volatility, Capstone Copper Corp is 2.98 times less risky than Dor Copper. The otc stock trades about -0.4 of its potential returns per unit of risk. The Dor Copper Mining is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  9.80  in Dor Copper Mining on September 20, 2024 and sell it today you would earn a total of  1.20  from holding Dor Copper Mining or generate 12.24% return on investment over 90 days.

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

Capstone Copper Corp  vs.  Dor Copper Mining

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 latest unfluctuating performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Dor Copper Mining

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Dor Copper Mining are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Dor Copper reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Capstone Copper and Dor Copper

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

The idea behind Capstone Copper Corp and Dor Copper Mining 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.