Correlation Between Infinico Metals and Capstone Mining

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

Diversification Opportunities for Infinico Metals and Capstone Mining

-0.37

Correlation Coefficient

Infinico Metals  Capstone Mining

Very good diversification

The 3 months correlation between Infinico and Capstone is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Infinico Metals Corp 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 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 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 Infinico Metals i.e., Infinico Metals and Capstone Mining go up and down completely randomly.

Pair Corralation between Infinico Metals and Capstone Mining

Assuming the 90 days trading horizon Infinico Metals Corp is expected to under-perform the Capstone Mining. In addition to that, Infinico Metals is 2.35 times more volatile than Capstone Mining Corp. It trades about -0.08 of its total potential returns per unit of risk. Capstone Mining Corp is currently generating about 0.07 per unit of volatility. If you would invest  859.00  in Capstone Mining Corp on August 31, 2024 and sell it today you would earn a total of  84.00  from holding Capstone Mining Corp or generate 9.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.55%
Values	Daily Returns

Infinico Metals Corp  vs.  Capstone Mining Corp

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 abnormal performance in the last few months, the Stock's technical and fundamental indicators remain fairly stable which may send shares a bit higher in December 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Capstone Mining Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Capstone Mining Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Capstone Mining may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Infinico Metals and Capstone Mining

The main advantage of trading using opposite Infinico Metals and Capstone Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infinico Metals 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 Infinico Metals Corp 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.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.