Correlation Between FPX Nickel and Canada Nickel
Can any of the company-specific risk be diversified away by investing in both FPX Nickel and Canada 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 FPX Nickel and Canada Nickel 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 Canada Nickel, you can compare the effects of market volatilities on FPX Nickel and Canada 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 FPX Nickel with a short position of Canada Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of FPX Nickel and Canada Nickel.
Diversification Opportunities for FPX Nickel and Canada Nickel
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FPX and Canada is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding FPX Nickel Corp and Canada Nickel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canada Nickel 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 Canada Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canada Nickel has no effect on the direction of FPX Nickel i.e., FPX Nickel and Canada Nickel go up and down completely randomly.
Pair Corralation between FPX Nickel and Canada Nickel
Assuming the 90 days horizon FPX Nickel Corp is expected to under-perform the Canada Nickel. In addition to that, FPX Nickel is 1.23 times more volatile than Canada Nickel. It trades about -0.01 of its total potential returns per unit of risk. Canada Nickel is currently generating about 0.0 per unit of volatility. If you would invest 102.00 in Canada Nickel on August 29, 2024 and sell it today you would lose (34.00) from holding Canada Nickel or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
FPX Nickel Corp vs. Canada Nickel
Performance |
| Timeline |
| FPX Nickel Corp |
| Canada Nickel |
FPX Nickel and Canada Nickel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FPX Nickel and Canada Nickel
The main advantage of trading using opposite FPX Nickel and Canada Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FPX Nickel position performs unexpectedly, Canada 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 Canada Nickel will offset losses from the drop in Canada Nickel's long position.| FPX Nickel vs. Oroco Resource Corp | FPX Nickel vs. Syrah Resources Limited | FPX Nickel vs. Graphite One | FPX Nickel vs. Westwater Resources |
| Canada Nickel vs. Nobel Resources Corp | Canada Nickel vs. Juggernaut Exploration | Canada Nickel vs. SPC Nickel Corp | Canada Nickel vs. Lotus Resources Limited |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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