Correlation Between Capstone Mining and CVS HEALTH

Can any of the company-specific risk be diversified away by investing in both Capstone Mining and CVS HEALTH 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 CVS HEALTH 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 CVS HEALTH CDR, you can compare the effects of market volatilities on Capstone Mining and CVS HEALTH 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 CVS HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capstone Mining and CVS HEALTH.

Diversification Opportunities for Capstone Mining and CVS HEALTH

0.11

Correlation Coefficient

Capstone Mining  CVS HEALTH

Average diversification

The 3 months correlation between Capstone and CVS is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Capstone Mining Corp and CVS HEALTH CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVS HEALTH CDR 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 CVS HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVS HEALTH CDR has no effect on the direction of Capstone Mining i.e., Capstone Mining and CVS HEALTH go up and down completely randomly.

Pair Corralation between Capstone Mining and CVS HEALTH

Assuming the 90 days horizon Capstone Mining Corp is expected to generate 1.29 times more return on investment than CVS HEALTH. However, Capstone Mining is 1.29 times more volatile than CVS HEALTH CDR. It trades about 0.14 of its potential returns per unit of risk. CVS HEALTH CDR is currently generating about -0.05 per unit of risk. If you would invest  658.00  in Capstone Mining Corp on April 23, 2025 and sell it today you would earn a total of  133.00  from holding Capstone Mining Corp or generate 20.21% return on investment over 90 days.

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

Capstone Mining Corp  vs.  CVS HEALTH CDR

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 uncertain basic indicators, Capstone Mining displayed solid returns over the last few months and may actually be approaching a breakup point.

CVS HEALTH CDR

Risk-Adjusted Performance

Very Weak

Over the last 90 days CVS HEALTH CDR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, CVS HEALTH is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Capstone Mining and CVS HEALTH

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

The idea behind Capstone Mining Corp and CVS HEALTH CDR 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.