Correlation Between Orbit Garant and Capstone Mining

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

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

Diversification Opportunities for Orbit Garant and Capstone Mining

-0.6

Correlation Coefficient

Orbit Garant  Capstone Mining

Excellent diversification

The 3 months correlation between Orbit and Capstone is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Orbit Garant Drilling 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 Orbit Garant 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 Orbit Garant Drilling 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 Orbit Garant i.e., Orbit Garant and Capstone Mining go up and down completely randomly.

Pair Corralation between Orbit Garant and Capstone Mining

Assuming the 90 days trading horizon Orbit Garant Drilling is expected to under-perform the Capstone Mining. In addition to that, Orbit Garant is 1.66 times more volatile than Capstone Mining Corp. It trades about -0.11 of its total potential returns per unit of risk. Capstone Mining Corp is currently generating about -0.17 per unit of volatility. If you would invest  984.00  in Capstone Mining Corp on September 25, 2024 and sell it today you would lose (84.00) from holding Capstone Mining Corp or give up 8.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Orbit Garant Drilling  vs.  Capstone Mining Corp

Orbit Garant Drilling

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Orbit Garant Drilling are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Orbit Garant displayed solid returns over the last few months and may actually be approaching a breakup point.

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 latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Orbit Garant and Capstone Mining

The main advantage of trading using opposite Orbit Garant and Capstone Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orbit Garant 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 Orbit Garant Drilling 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.