Correlation Between Capstone Mining and GoldQuest Mining

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

Diversification Opportunities for Capstone Mining and GoldQuest Mining

0.77

Correlation Coefficient

Capstone Mining  GoldQuest Mining

Poor diversification

The 3 months correlation between Capstone and GoldQuest is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Capstone Mining Corp and GoldQuest Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoldQuest Mining Corp 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 GoldQuest Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoldQuest Mining Corp has no effect on the direction of Capstone Mining i.e., Capstone Mining and GoldQuest Mining go up and down completely randomly.

Pair Corralation between Capstone Mining and GoldQuest Mining

Assuming the 90 days horizon Capstone Mining is expected to generate 5.62 times less return on investment than GoldQuest Mining. But when comparing it to its historical volatility, Capstone Mining Corp is 1.87 times less risky than GoldQuest Mining. It trades about 0.03 of its potential returns per unit of risk. GoldQuest Mining Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  9.00  in GoldQuest Mining Corp on April 22, 2025 and sell it today you would earn a total of  57.00  from holding GoldQuest Mining Corp or generate 633.33% return on investment over 90 days.

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

Capstone Mining Corp  vs.  GoldQuest Mining Corp

Capstone Mining Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Capstone Mining Corp are ranked lower than 12 (%) 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.

GoldQuest Mining Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GoldQuest Mining Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, GoldQuest Mining showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Capstone Mining and GoldQuest Mining

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

The idea behind Capstone Mining Corp and GoldQuest 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.