Correlation Between Eddy Smart and FPX Nickel
Can any of the company-specific risk be diversified away by investing in both Eddy Smart 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 Eddy Smart and FPX Nickel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eddy Smart Home and FPX Nickel Corp, you can compare the effects of market volatilities on Eddy Smart 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 Eddy Smart with a short position of FPX Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eddy Smart and FPX Nickel.
Diversification Opportunities for Eddy Smart and FPX Nickel
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Eddy and FPX is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Eddy Smart Home 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 Eddy Smart 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 Eddy Smart Home 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 Eddy Smart i.e., Eddy Smart and FPX Nickel go up and down completely randomly.
Pair Corralation between Eddy Smart and FPX Nickel
Assuming the 90 days horizon Eddy Smart Home is expected to under-perform the FPX Nickel. In addition to that, Eddy Smart is 1.12 times more volatile than FPX Nickel Corp. It trades about -0.38 of its total potential returns per unit of risk. FPX Nickel Corp is currently generating about -0.27 per unit of volatility. If you would invest 28.00 in FPX Nickel Corp on September 3, 2024 and sell it today you would lose (4.00) from holding FPX Nickel Corp or give up 14.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eddy Smart Home vs. FPX Nickel Corp
Performance |
| Timeline |
| Eddy Smart Home |
| FPX Nickel Corp |
Eddy Smart and FPX Nickel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eddy Smart and FPX Nickel
The main advantage of trading using opposite Eddy Smart and FPX Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eddy Smart 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.| Eddy Smart vs. Enghouse Systems | Eddy Smart vs. Pulse Seismic | Eddy Smart vs. Harvest Global REIT | Eddy Smart vs. International Zeolite Corp |
| FPX Nickel vs. Medical Facilities | FPX Nickel vs. CI Financial Corp | FPX Nickel vs. TGS Esports | FPX Nickel vs. Toronto Dominion Bank |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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