Correlation Between Capstone Mining and Broadcom

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

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

Diversification Opportunities for Capstone Mining and Broadcom

0.64

Correlation Coefficient

Capstone Mining  Broadcom

Poor diversification

The 3 months correlation between Capstone and Broadcom is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Capstone Mining Corp and Broadcom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broadcom and Capstone 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 Capstone Mining Corp are associated (or correlated) with Broadcom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broadcom has no effect on the direction of Capstone Mining i.e., Capstone Mining and Broadcom go up and down completely randomly.

Pair Corralation between Capstone Mining and Broadcom

Assuming the 90 days horizon Capstone Mining Corp is expected to generate 1.3 times more return on investment than Broadcom. However, Capstone Mining is 1.3 times more volatile than Broadcom. It trades about 0.14 of its potential returns per unit of risk. Broadcom is currently generating about 0.08 per unit of risk. If you would invest  927.00  in Capstone Mining Corp on August 14, 2025 and sell it today you would earn a total of  292.00  from holding Capstone Mining Corp or generate 31.5% return on investment over 90 days.

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

Capstone Mining Corp  vs.  Broadcom

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 11 (%) 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.

Broadcom

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Broadcom are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Broadcom exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Capstone Mining and Broadcom

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

The idea behind Capstone Mining Corp and Broadcom 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..