Correlation Between FPX Nickel and American Lithium
Can any of the company-specific risk be diversified away by investing in both FPX Nickel and American Lithium 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 American Lithium 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 American Lithium Corp, you can compare the effects of market volatilities on FPX Nickel and American Lithium 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 American Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of FPX Nickel and American Lithium.
Diversification Opportunities for FPX Nickel and American Lithium
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FPX and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FPX Nickel Corp and American Lithium Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Lithium Corp 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 American Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Lithium Corp has no effect on the direction of FPX Nickel i.e., FPX Nickel and American Lithium go up and down completely randomly.
Pair Corralation between FPX Nickel and American Lithium
Assuming the 90 days horizon FPX Nickel Corp is expected to generate 0.83 times more return on investment than American Lithium. However, FPX Nickel Corp is 1.21 times less risky than American Lithium. It trades about -0.03 of its potential returns per unit of risk. American Lithium Corp is currently generating about -0.03 per unit of risk. If you would invest 57.00 in FPX Nickel Corp on August 31, 2024 and sell it today you would lose (33.00) from holding FPX Nickel Corp or give up 57.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FPX Nickel Corp vs. American Lithium Corp
Performance |
| Timeline |
| FPX Nickel Corp |
| American Lithium Corp |
FPX Nickel and American Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FPX Nickel and American Lithium
The main advantage of trading using opposite FPX Nickel and American Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FPX Nickel position performs unexpectedly, American Lithium 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 American Lithium will offset losses from the drop in American Lithium's long position.| FPX Nickel vs. Diamond Estates Wines | FPX Nickel vs. Solid Impact Investments | FPX Nickel vs. Data Communications Management | FPX Nickel vs. Diversified Royalty Corp |
| American Lithium vs. TUT Fitness Group | American Lithium vs. DRI Healthcare Trust | American Lithium vs. Pollard Banknote Limited | American Lithium vs. iA Financial |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |