Correlation Between Capstone Copper and Nevada Copper

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

Diversification Opportunities for Capstone Copper and Nevada Copper

0.0

Correlation Coefficient

Capstone Copper  Nevada Copper

Pay attention - limited upside

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

Pair Corralation between Capstone Copper and Nevada Copper

If you would invest (100.00) in Nevada Copper Corp on December 1, 2024 and sell it today you would earn a total of  100.00  from holding Nevada Copper Corp or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Capstone Copper Corp  vs.  Nevada Copper Corp

Capstone Copper Corp

Risk-Adjusted Performance

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 April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Nevada Copper Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nevada Copper Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Nevada Copper is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Capstone Copper and Nevada Copper

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

The idea behind Capstone Copper Corp and Nevada Copper 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.