Correlation Between Falcon Energy and Capstone Mining

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

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

Diversification Opportunities for Falcon Energy and Capstone Mining

-0.78

Correlation Coefficient

Falcon Energy  Capstone Mining

Pay attention - limited upside

The 3 months correlation between Falcon and Capstone is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Falcon Energy Materials and Capstone Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capstone Mining Corp and Falcon Energy 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 Falcon Energy Materials are associated (or correlated) with Capstone Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capstone Mining Corp has no effect on the direction of Falcon Energy i.e., Falcon Energy and Capstone Mining go up and down completely randomly.

Pair Corralation between Falcon Energy and Capstone Mining

Assuming the 90 days trading horizon Falcon Energy Materials is expected to under-perform the Capstone Mining. In addition to that, Falcon Energy is 1.92 times more volatile than Capstone Mining Corp. It trades about -0.02 of its total potential returns per unit of risk. Capstone Mining Corp is currently generating about 0.13 per unit of volatility. If you would invest  682.00  in Capstone Mining Corp on April 24, 2025 and sell it today you would earn a total of  129.00  from holding Capstone Mining Corp or generate 18.91% return on investment over 90 days.

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

Falcon Energy Materials  vs.  Capstone Mining Corp

Falcon Energy Materials

Risk-Adjusted Performance

Very Weak

Over the last 90 days Falcon Energy Materials has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Falcon Energy is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

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.

Pair Trading with Falcon Energy and Capstone Mining

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

The idea behind Falcon Energy Materials and Capstone 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.