Correlation Between Houston Natural and Capstone Copper

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

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

Diversification Opportunities for Houston Natural and Capstone Copper

-0.43

Correlation Coefficient

Houston Natural  Capstone Copper

Very good diversification

The 3 months correlation between Houston and Capstone is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Houston Natural 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 Houston Natural 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 Houston Natural 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 Houston Natural i.e., Houston Natural and Capstone Copper go up and down completely randomly.

Pair Corralation between Houston Natural and Capstone Copper

If you would invest  477.00  in Capstone Copper Corp on May 3, 2025 and sell it today you would earn a total of  50.00  from holding Capstone Copper Corp or generate 10.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.64%
Values	Daily Returns

Houston Natural Resources  vs.  Capstone Copper Corp

Houston Natural Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Houston Natural Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Houston Natural is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Capstone Copper Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Capstone Copper Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating fundamental indicators, Capstone Copper reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Houston Natural and Capstone Copper

The main advantage of trading using opposite Houston Natural and Capstone Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Houston Natural 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 Houston Natural 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.