Correlation Between Wishpond Technologies and Capstone Mining

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

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

Diversification Opportunities for Wishpond Technologies and Capstone Mining

-0.83

Correlation Coefficient

Wishpond Technologies  Capstone Mining

Pay attention - limited upside

The 3 months correlation between Wishpond and Capstone is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Wishpond Technologies 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 Wishpond Technologies 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 Wishpond Technologies 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 Wishpond Technologies i.e., Wishpond Technologies and Capstone Mining go up and down completely randomly.

Pair Corralation between Wishpond Technologies and Capstone Mining

Assuming the 90 days trading horizon Wishpond Technologies is expected to generate 1.35 times more return on investment than Capstone Mining. However, Wishpond Technologies is 1.35 times more volatile than Capstone Mining Corp. It trades about 0.06 of its potential returns per unit of risk. Capstone Mining Corp is currently generating about -0.06 per unit of risk. If you would invest  28.00  in Wishpond Technologies on November 29, 2024 and sell it today you would earn a total of  3.00  from holding Wishpond Technologies or generate 10.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Wishpond Technologies  vs.  Capstone Mining Corp

Wishpond Technologies

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Wishpond Technologies are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Wishpond Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Capstone Mining Corp

Risk-Adjusted Performance

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 abnormal 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 Wishpond Technologies and Capstone Mining

The main advantage of trading using opposite Wishpond Technologies and Capstone Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wishpond Technologies 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 Wishpond Technologies 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.