Correlation Between Infinico Metals and Capitan Mining

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

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

Diversification Opportunities for Infinico Metals and Capitan Mining

-0.7

Correlation Coefficient

Infinico Metals  Capitan Mining

Excellent diversification

The 3 months correlation between Infinico and Capitan is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Infinico Metals Corp and Capitan Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capitan Mining and Infinico Metals 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 Infinico Metals Corp are associated (or correlated) with Capitan Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capitan Mining has no effect on the direction of Infinico Metals i.e., Infinico Metals and Capitan Mining go up and down completely randomly.

Pair Corralation between Infinico Metals and Capitan Mining

Assuming the 90 days trading horizon Infinico Metals Corp is expected to generate 1.69 times more return on investment than Capitan Mining. However, Infinico Metals is 1.69 times more volatile than Capitan Mining. It trades about 0.03 of its potential returns per unit of risk. Capitan Mining is currently generating about 0.03 per unit of risk. If you would invest  5.00  in Infinico Metals Corp on September 21, 2024 and sell it today you would lose (3.00) from holding Infinico Metals Corp or give up 60.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	82.09%
Values	Daily Returns

Infinico Metals Corp  vs.  Capitan Mining

Infinico Metals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Infinico Metals 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 technical and fundamental indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Capitan Mining

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Capitan Mining are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Capitan Mining showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Infinico Metals and Capitan Mining

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

The idea behind Infinico Metals Corp and Capitan 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.

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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..