Correlation Between Dor Copper and Capstone Copper

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

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

Diversification Opportunities for Dor Copper and Capstone Copper

-0.14

Correlation Coefficient

Dor Copper  Capstone Copper

Good diversification

The 3 months correlation between Dor and Capstone is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Dor Copper Mining and Capstone Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capstone Copper Corp and Dor 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 Dor Copper Mining are associated (or correlated) with Capstone Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capstone Copper Corp has no effect on the direction of Dor Copper i.e., Dor Copper and Capstone Copper go up and down completely randomly.

Pair Corralation between Dor Copper and Capstone Copper

Assuming the 90 days horizon Dor Copper Mining is expected to generate 2.34 times more return on investment than Capstone Copper. However, Dor Copper is 2.34 times more volatile than Capstone Copper Corp. It trades about 0.05 of its potential returns per unit of risk. Capstone Copper Corp is currently generating about 0.05 per unit of risk. If you would invest  8.00  in Dor Copper Mining on October 6, 2024 and sell it today you would earn a total of  3.00  from holding Dor Copper Mining or generate 37.5% return on investment over 90 days.

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

Dor Copper Mining  vs.  Capstone Copper Corp

Dor Copper Mining

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dor Copper Mining are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak primary indicators, Dor Copper reported solid returns over the last few months and may actually be approaching a breakup point.

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

Pair Trading with Dor Copper and Capstone Copper

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

The idea behind Dor Copper Mining and Capstone 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.

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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.