Correlation Between Capstone Copper and Collins Foods

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

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

Diversification Opportunities for Capstone Copper and Collins Foods

0.38

Correlation Coefficient

Capstone Copper  Collins Foods

Weak diversification

The 3 months correlation between Capstone and Collins is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Capstone Copper Corp and Collins Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collins Foods and Capstone Copper 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 Copper Corp are associated (or correlated) with Collins Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collins Foods has no effect on the direction of Capstone Copper i.e., Capstone Copper and Collins Foods go up and down completely randomly.

Pair Corralation between Capstone Copper and Collins Foods

Assuming the 90 days trading horizon Capstone Copper Corp is expected to generate 0.95 times more return on investment than Collins Foods. However, Capstone Copper Corp is 1.05 times less risky than Collins Foods. It trades about 0.13 of its potential returns per unit of risk. Collins Foods is currently generating about 0.07 per unit of risk. If you would invest  751.00  in Capstone Copper Corp on April 24, 2025 and sell it today you would earn a total of  151.00  from holding Capstone Copper Corp or generate 20.11% return on investment over 90 days.

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

Capstone Copper Corp  vs.  Collins Foods

Capstone Copper Corp

Risk-Adjusted Performance

OK

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

Collins Foods

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Collins Foods are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Collins Foods may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Capstone Copper and Collins Foods

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

The idea behind Capstone Copper Corp and Collins Foods 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.