Correlation Between Earth Alive and Capstone Mining

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

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

Diversification Opportunities for Earth Alive and Capstone Mining

0.0

Correlation Coefficient

Earth Alive  Capstone Mining

Pay attention - limited upside

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

Pair Corralation between Earth Alive and Capstone Mining

If you would invest  0.50  in Earth Alive Clean on October 8, 2024 and sell it today you would earn a total of  0.00  from holding Earth Alive Clean or generate 0.0% return on investment over 90 days.

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

Earth Alive Clean  vs.  Capstone Mining Corp

Earth Alive Clean

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Earth Alive Clean has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Earth Alive is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Capstone Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Capstone Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Earth Alive and Capstone Mining

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

The idea behind Earth Alive Clean and Capstone Mining 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.