Correlation Between Capitan Mining and Canadian Palladium

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

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

Diversification Opportunities for Capitan Mining and Canadian Palladium

-0.79

Correlation Coefficient

Capitan Mining  Canadian Palladium

Pay attention - limited upside

The 3 months correlation between Capitan and Canadian is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Capitan Mining and Canadian Palladium Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Palladium and Capitan 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 Capitan Mining are associated (or correlated) with Canadian Palladium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Palladium has no effect on the direction of Capitan Mining i.e., Capitan Mining and Canadian Palladium go up and down completely randomly.

Pair Corralation between Capitan Mining and Canadian Palladium

Assuming the 90 days horizon Capitan Mining is expected to generate 0.45 times more return on investment than Canadian Palladium. However, Capitan Mining is 2.2 times less risky than Canadian Palladium. It trades about 0.17 of its potential returns per unit of risk. Canadian Palladium Resources is currently generating about -0.02 per unit of risk. If you would invest  67.00  in Capitan Mining on August 4, 2025 and sell it today you would earn a total of  49.00  from holding Capitan Mining or generate 73.13% return on investment over 90 days.

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

Capitan Mining  vs.  Canadian Palladium Resources

Capitan Mining

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Capitan Mining are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Capitan Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Canadian Palladium

Risk-Adjusted Performance

Weakest

Over the last 90 days Canadian Palladium Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in December 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Capitan Mining and Canadian Palladium

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

The idea behind Capitan Mining and Canadian Palladium Resources 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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.