Correlation Between ISign Media and Capstone Mining

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

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

Diversification Opportunities for ISign Media and Capstone Mining

0.27

Correlation Coefficient

ISign Media  Capstone Mining

Modest diversification

The 3 months correlation between ISign and Capstone is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding iSign Media Solutions 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 ISign Media 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 iSign Media Solutions 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 ISign Media i.e., ISign Media and Capstone Mining go up and down completely randomly.

Pair Corralation between ISign Media and Capstone Mining

Assuming the 90 days horizon ISign Media is expected to generate 20.83 times less return on investment than Capstone Mining. But when comparing it to its historical volatility, iSign Media Solutions is 3.56 times less risky than Capstone Mining. It trades about 0.01 of its potential returns per unit of risk. Capstone Mining Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  859.00  in Capstone Mining Corp on September 3, 2024 and sell it today you would earn a total of  109.00  from holding Capstone Mining Corp or generate 12.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

iSign Media Solutions  vs.  Capstone Mining Corp

iSign Media Solutions

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in iSign Media Solutions are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, ISign Media is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Capstone Mining Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Capstone Mining Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Capstone Mining displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ISign Media and Capstone Mining

The main advantage of trading using opposite ISign Media and Capstone Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ISign Media 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 iSign Media Solutions 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.