Correlation Between Capstone Mining and Western Copper

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

Diversification Opportunities for Capstone Mining and Western Copper

0.54

Correlation Coefficient

Capstone Mining  Western Copper

Very weak diversification

The 3 months correlation between Capstone and Western is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Capstone Mining Corp and Western Copper and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Copper 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 Western Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Copper has no effect on the direction of Capstone Mining i.e., Capstone Mining and Western Copper go up and down completely randomly.

Pair Corralation between Capstone Mining and Western Copper

Assuming the 90 days horizon Capstone Mining Corp is expected to generate 0.84 times more return on investment than Western Copper. However, Capstone Mining Corp is 1.19 times less risky than Western Copper. It trades about 0.16 of its potential returns per unit of risk. Western Copper and is currently generating about 0.05 per unit of risk. If you would invest  606.00  in Capstone Mining Corp on April 22, 2025 and sell it today you would earn a total of  168.00  from holding Capstone Mining Corp or generate 27.72% return on investment over 90 days.

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

Capstone Mining Corp  vs.  Western Copper and

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.

Western Copper

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Western Copper and are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Western Copper may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Capstone Mining and Western Copper

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

The idea behind Capstone Mining Corp and Western Copper and 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.

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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.