Correlation Between FPX Nickel and Plaza Retail
Can any of the company-specific risk be diversified away by investing in both FPX Nickel and Plaza Retail 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 Plaza Retail 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 Plaza Retail REIT, you can compare the effects of market volatilities on FPX Nickel and Plaza Retail 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 Plaza Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of FPX Nickel and Plaza Retail.
Diversification Opportunities for FPX Nickel and Plaza Retail
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FPX and Plaza is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding FPX Nickel Corp and Plaza Retail REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plaza Retail REIT 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 Plaza Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plaza Retail REIT has no effect on the direction of FPX Nickel i.e., FPX Nickel and Plaza Retail go up and down completely randomly.
Pair Corralation between FPX Nickel and Plaza Retail
Assuming the 90 days horizon FPX Nickel Corp is expected to generate 5.61 times more return on investment than Plaza Retail. However, FPX Nickel is 5.61 times more volatile than Plaza Retail REIT. It trades about -0.04 of its potential returns per unit of risk. Plaza Retail REIT is currently generating about -0.28 per unit of risk. If you would invest 26.00 in FPX Nickel Corp on September 14, 2024 and sell it today you would lose (1.00) from holding FPX Nickel Corp or give up 3.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
FPX Nickel Corp vs. Plaza Retail REIT
Performance |
| Timeline |
| FPX Nickel Corp |
| Plaza Retail REIT |
FPX Nickel and Plaza Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FPX Nickel and Plaza Retail
The main advantage of trading using opposite FPX Nickel and Plaza Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FPX Nickel position performs unexpectedly, Plaza Retail 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 Plaza Retail will offset losses from the drop in Plaza Retail's long position.| FPX Nickel vs. Canso Select Opportunities | FPX Nickel vs. National Bank of | FPX Nickel vs. First National Financial | FPX Nickel vs. Canadian Imperial Bank |
| Plaza Retail vs. Slate Office REIT | Plaza Retail vs. Automotive Properties Real | Plaza Retail vs. BTB Real Estate | Plaza Retail vs. iShares Canadian HYBrid |
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.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |