Correlation Between Monument Mining and Capstone Mining

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

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

Diversification Opportunities for Monument Mining and Capstone Mining

-0.61

Correlation Coefficient

Monument Mining  Capstone Mining

Excellent diversification

The 3 months correlation between Monument and Capstone is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Monument Mining Limited 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 Monument 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 Monument Mining Limited 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 Monument Mining i.e., Monument Mining and Capstone Mining go up and down completely randomly.

Pair Corralation between Monument Mining and Capstone Mining

Assuming the 90 days horizon Monument Mining Limited is expected to under-perform the Capstone Mining. In addition to that, Monument Mining is 1.17 times more volatile than Capstone Mining Corp. It trades about -0.03 of its total potential returns per unit of risk. Capstone Mining Corp is currently generating about 0.17 per unit of volatility. If you would invest  606.00  in Capstone Mining Corp on April 22, 2025 and sell it today you would earn a total of  185.00  from holding Capstone Mining Corp or generate 30.53% return on investment over 90 days.

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

Monument Mining Limited  vs.  Capstone Mining Corp

Monument Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days Monument Mining Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

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 13 (%) 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 Monument Mining and Capstone Mining

The main advantage of trading using opposite Monument Mining and Capstone Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monument Mining 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 Monument Mining Limited 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.