Correlation Between Capstone Mining and Bird Construction

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

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

Diversification Opportunities for Capstone Mining and Bird Construction

0.85

Correlation Coefficient

Capstone Mining  Bird Construction

Very poor diversification

The 3 months correlation between Capstone and Bird is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Capstone Mining Corp and Bird Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bird Construction and Capstone 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 Capstone Mining Corp are associated (or correlated) with Bird Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bird Construction has no effect on the direction of Capstone Mining i.e., Capstone Mining and Bird Construction go up and down completely randomly.

Pair Corralation between Capstone Mining and Bird Construction

Assuming the 90 days horizon Capstone Mining is expected to generate 1.83 times less return on investment than Bird Construction. In addition to that, Capstone Mining is 1.38 times more volatile than Bird Construction. It trades about 0.13 of its total potential returns per unit of risk. Bird Construction is currently generating about 0.33 per unit of volatility. If you would invest  2,082  in Bird Construction on April 24, 2025 and sell it today you would earn a total of  839.00  from holding Bird Construction or generate 40.3% return on investment over 90 days.

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

Capstone Mining Corp  vs.  Bird Construction

Capstone Mining Corp

Risk-Adjusted Performance

OK

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

Bird Construction

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Bird Construction are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Bird Construction displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Capstone Mining and Bird Construction

The main advantage of trading using opposite Capstone Mining and Bird Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capstone Mining position performs unexpectedly, Bird Construction 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 Bird Construction will offset losses from the drop in Bird Construction's long position.

The idea behind Capstone Mining Corp and Bird Construction 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.