Correlation Between Capitan Mining and Infrastructure Dividend

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Can any of the company-specific risk be diversified away by investing in both Capitan Mining and Infrastructure Dividend 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 Capitan Mining and Infrastructure Dividend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capitan Mining and Infrastructure Dividend Split, you can compare the effects of market volatilities on Capitan Mining and Infrastructure Dividend 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 Capitan Mining with a short position of Infrastructure Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capitan Mining and Infrastructure Dividend.

Diversification Opportunities for Capitan Mining and Infrastructure Dividend

0.69
  Correlation Coefficient

Poor diversification

The 3 months correlation between Capitan and Infrastructure is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Capitan Mining and Infrastructure Dividend Split in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infrastructure Dividend and Capitan Mining 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 Capitan Mining are associated (or correlated) with Infrastructure Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infrastructure Dividend has no effect on the direction of Capitan Mining i.e., Capitan Mining and Infrastructure Dividend go up and down completely randomly.

Pair Corralation between Capitan Mining and Infrastructure Dividend

Assuming the 90 days trading horizon Capitan Mining is expected to generate 9.64 times more return on investment than Infrastructure Dividend. However, Capitan Mining is 9.64 times more volatile than Infrastructure Dividend Split. It trades about 0.2 of its potential returns per unit of risk. Infrastructure Dividend Split is currently generating about 0.3 per unit of risk. If you would invest  41.00  in Capitan Mining on April 22, 2025 and sell it today you would earn a total of  54.00  from holding Capitan Mining or generate 131.71% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Capitan Mining  vs.  Infrastructure Dividend Split

 Performance 
       Timeline  
Capitan Mining 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Capitan Mining are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Capitan Mining showed solid returns over the last few months and may actually be approaching a breakup point.
Infrastructure Dividend 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Over the last 90 days Infrastructure Dividend Split has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very weak basic indicators, Infrastructure Dividend displayed solid returns over the last few months and may actually be approaching a breakup point.

Capitan Mining and Infrastructure Dividend Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Capitan Mining and Infrastructure Dividend

The main advantage of trading using opposite Capitan Mining and Infrastructure Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capitan Mining position performs unexpectedly, Infrastructure Dividend 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 Infrastructure Dividend will offset losses from the drop in Infrastructure Dividend's long position.
The idea behind Capitan Mining and Infrastructure Dividend Split 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

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