Correlation Between Northern Star and Capstone Copper

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

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

Diversification Opportunities for Northern Star and Capstone Copper

-0.41

Correlation Coefficient

Northern Star  Capstone Copper

Very good diversification

The 3 months correlation between Northern and Capstone is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Northern Star Resources and Capstone Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capstone Copper Corp and Northern Star 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 Northern Star Resources are associated (or correlated) with Capstone Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capstone Copper Corp has no effect on the direction of Northern Star i.e., Northern Star and Capstone Copper go up and down completely randomly.

Pair Corralation between Northern Star and Capstone Copper

Assuming the 90 days trading horizon Northern Star Resources is expected to under-perform the Capstone Copper. In addition to that, Northern Star is 1.01 times more volatile than Capstone Copper Corp. It trades about -0.13 of its total potential returns per unit of risk. Capstone Copper Corp is currently generating about 0.14 per unit of volatility. If you would invest  764.00  in Capstone Copper Corp on April 25, 2025 and sell it today you would earn a total of  166.00  from holding Capstone Copper Corp or generate 21.73% return on investment over 90 days.

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

Northern Star Resources  vs.  Capstone Copper Corp

Northern Star Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Northern Star Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Capstone Copper Corp

Risk-Adjusted Performance

Good

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.

Pair Trading with Northern Star and Capstone Copper

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

The idea behind Northern Star Resources and Capstone Copper 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.