Correlation Between East Side and FPX Nickel
Can any of the company-specific risk be diversified away by investing in both East Side 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 East Side and FPX Nickel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between East Side Games and FPX Nickel Corp, you can compare the effects of market volatilities on East Side 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 East Side with a short position of FPX Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of East Side and FPX Nickel.
Diversification Opportunities for East Side and FPX Nickel
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between East and FPX is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding East Side Games 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 East Side 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 East Side Games 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 East Side i.e., East Side and FPX Nickel go up and down completely randomly.
Pair Corralation between East Side and FPX Nickel
Assuming the 90 days trading horizon East Side Games is expected to under-perform the FPX Nickel. In addition to that, East Side is 1.57 times more volatile than FPX Nickel Corp. It trades about -0.06 of its total potential returns per unit of risk. FPX Nickel Corp is currently generating about 0.02 per unit of volatility. If you would invest 25.00 in FPX Nickel Corp on September 13, 2024 and sell it today you would earn a total of 0.00 from holding FPX Nickel Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
East Side Games vs. FPX Nickel Corp
Performance |
| Timeline |
| East Side Games |
| FPX Nickel Corp |
East Side and FPX Nickel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with East Side and FPX Nickel
The main advantage of trading using opposite East Side and FPX Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East Side 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.| East Side vs. Slate Grocery REIT | East Side vs. Roots Corp | East Side vs. Aimia Inc | East Side vs. Morguard Real Estate |
| FPX Nickel vs. Plaza Retail REIT | FPX Nickel vs. Quorum Information Technologies | FPX Nickel vs. Air Canada | FPX Nickel vs. Western Investment |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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