Correlation Between FPX Nickel and Lithium Power
Can any of the company-specific risk be diversified away by investing in both FPX Nickel and Lithium Power 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 Lithium Power 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 Lithium Power International, you can compare the effects of market volatilities on FPX Nickel and Lithium Power 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 Lithium Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of FPX Nickel and Lithium Power.
Diversification Opportunities for FPX Nickel and Lithium Power
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between FPX and Lithium is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding FPX Nickel Corp and Lithium Power International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lithium Power Intern 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 Lithium Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lithium Power Intern has no effect on the direction of FPX Nickel i.e., FPX Nickel and Lithium Power go up and down completely randomly.
Pair Corralation between FPX Nickel and Lithium Power
Assuming the 90 days horizon FPX Nickel Corp is expected to generate 0.75 times more return on investment than Lithium Power. However, FPX Nickel Corp is 1.34 times less risky than Lithium Power. It trades about 0.0 of its potential returns per unit of risk. Lithium Power International is currently generating about -0.02 per unit of risk. If you would invest 30.00 in FPX Nickel Corp on September 3, 2024 and sell it today you would lose (13.00) from holding FPX Nickel Corp or give up 43.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 28.0% |
| Values | Daily Returns |
FPX Nickel Corp vs. Lithium Power International
Performance |
| Timeline |
| FPX Nickel Corp |
| Lithium Power Intern |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
FPX Nickel and Lithium Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FPX Nickel and Lithium Power
The main advantage of trading using opposite FPX Nickel and Lithium Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FPX Nickel position performs unexpectedly, Lithium Power 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 Lithium Power will offset losses from the drop in Lithium Power'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 |
| Lithium Power vs. Macmahon Holdings Limited | Lithium Power vs. Rokmaster Resources Corp | Lithium Power vs. Hudson Resources | Lithium Power vs. Thunder Gold Corp |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |