Correlation Between Xtract One and Capstone Mining
Can any of the company-specific risk be diversified away by investing in both Xtract One 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 Xtract One and Capstone Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtract One Technologies and Capstone Mining Corp, you can compare the effects of market volatilities on Xtract One 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 Xtract One with a short position of Capstone Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtract One and Capstone Mining.
Diversification Opportunities for Xtract One and Capstone Mining
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Xtract and Capstone is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Xtract One 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 Xtract One 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 Xtract One 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 Xtract One i.e., Xtract One and Capstone Mining go up and down completely randomly.
Pair Corralation between Xtract One and Capstone Mining
Assuming the 90 days trading horizon Xtract One Technologies is expected to under-perform the Capstone Mining. In addition to that, Xtract One is 1.18 times more volatile than Capstone Mining Corp. It trades about -0.06 of its total potential returns per unit of risk. Capstone Mining Corp is currently generating about -0.04 per unit of volatility. If you would invest 873.00 in Capstone Mining Corp on December 30, 2024 and sell it today you would lose (100.00) from holding Capstone Mining Corp or give up 11.45% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Xtract One Technologies vs. Capstone Mining Corp
Performance |
Timeline |
Xtract One Technologies |
Capstone Mining Corp |
Xtract One and Capstone Mining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xtract One and Capstone Mining
The main advantage of trading using opposite Xtract One and Capstone Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtract One 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.Xtract One vs. Mayfair Acquisition | Xtract One vs. Major Drilling Group | Xtract One vs. Data Communications Management | Xtract One vs. Ramp Metals |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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