Correlation Between Infinite Ore and FPX Nickel
Can any of the company-specific risk be diversified away by investing in both Infinite Ore and FPX Nickel 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 Infinite Ore and FPX Nickel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infinite Ore Corp and FPX Nickel Corp, you can compare the effects of market volatilities on Infinite Ore and FPX Nickel 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 Infinite Ore with a short position of FPX Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infinite Ore and FPX Nickel.
Diversification Opportunities for Infinite Ore and FPX Nickel
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Infinite and FPX is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Infinite Ore Corp and FPX Nickel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FPX Nickel Corp and Infinite Ore 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 Infinite Ore Corp are associated (or correlated) with FPX Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FPX Nickel Corp has no effect on the direction of Infinite Ore i.e., Infinite Ore and FPX Nickel go up and down completely randomly.
Pair Corralation between Infinite Ore and FPX Nickel
Assuming the 90 days horizon Infinite Ore Corp is expected to generate 2.9 times more return on investment than FPX Nickel. However, Infinite Ore is 2.9 times more volatile than FPX Nickel Corp. It trades about 0.03 of its potential returns per unit of risk. FPX Nickel Corp is currently generating about -0.04 per unit of risk. If you would invest 1.80 in Infinite Ore Corp on September 1, 2024 and sell it today you would lose (0.10) from holding Infinite Ore Corp or give up 5.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Infinite Ore Corp vs. FPX Nickel Corp
Performance |
| Timeline |
| Infinite Ore Corp |
| FPX Nickel Corp |
Infinite Ore and FPX Nickel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infinite Ore and FPX Nickel
The main advantage of trading using opposite Infinite Ore and FPX Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infinite Ore position performs unexpectedly, FPX Nickel 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 FPX Nickel will offset losses from the drop in FPX Nickel's long position.| Infinite Ore vs. Pampa Metals | Infinite Ore vs. Progressive Planet Solutions | Infinite Ore vs. Searchlight Resources | Infinite Ore vs. Durango Resources |
| FPX Nickel vs. South32 Limited | FPX Nickel vs. NioCorp Developments Ltd | FPX Nickel vs. HUMANA INC | FPX Nickel vs. SCOR PK |
Check out your portfolio center.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 Transaction History module to view history of all your transactions and understand their impact on performance.
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