Correlation Between FPX Nickel and BLUESCOPE STEEL
Can any of the company-specific risk be diversified away by investing in both FPX Nickel and BLUESCOPE STEEL 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 FPX Nickel and BLUESCOPE STEEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FPX Nickel Corp and BLUESCOPE STEEL, you can compare the effects of market volatilities on FPX Nickel and BLUESCOPE STEEL 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 FPX Nickel with a short position of BLUESCOPE STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of FPX Nickel and BLUESCOPE STEEL.
Diversification Opportunities for FPX Nickel and BLUESCOPE STEEL
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between FPX and BLUESCOPE is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding FPX Nickel Corp and BLUESCOPE STEEL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BLUESCOPE STEEL and FPX Nickel 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 FPX Nickel Corp are associated (or correlated) with BLUESCOPE STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BLUESCOPE STEEL has no effect on the direction of FPX Nickel i.e., FPX Nickel and BLUESCOPE STEEL go up and down completely randomly.
Pair Corralation between FPX Nickel and BLUESCOPE STEEL
Assuming the 90 days horizon FPX Nickel Corp is expected to generate 2.49 times more return on investment than BLUESCOPE STEEL. However, FPX Nickel is 2.49 times more volatile than BLUESCOPE STEEL. It trades about 0.01 of its potential returns per unit of risk. BLUESCOPE STEEL is currently generating about 0.01 per unit of risk. If you would invest 18.00 in FPX Nickel Corp on September 12, 2024 and sell it today you would lose (3.00) from holding FPX Nickel Corp or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FPX Nickel Corp vs. BLUESCOPE STEEL
Performance |
| Timeline |
| FPX Nickel Corp |
| BLUESCOPE STEEL |
FPX Nickel and BLUESCOPE STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FPX Nickel and BLUESCOPE STEEL
The main advantage of trading using opposite FPX Nickel and BLUESCOPE STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FPX Nickel position performs unexpectedly, BLUESCOPE STEEL 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 BLUESCOPE STEEL will offset losses from the drop in BLUESCOPE STEEL's long position.| FPX Nickel vs. Highlight Communications AG | FPX Nickel vs. SPORT LISBOA E | FPX Nickel vs. Big 5 Sporting | FPX Nickel vs. Entravision Communications |
| BLUESCOPE STEEL vs. Apple Inc | BLUESCOPE STEEL vs. Apple Inc | BLUESCOPE STEEL vs. Apple Inc | BLUESCOPE STEEL vs. Apple Inc |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |