Correlation Between Giga Metals and FPX Nickel
Can any of the company-specific risk be diversified away by investing in both Giga Metals and FPX 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 Giga Metals and FPX Nickel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Giga Metals Corp and FPX Nickel Corp, you can compare the effects of market volatilities on Giga Metals and FPX 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 Giga Metals with a short position of FPX Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Giga Metals and FPX Nickel.
Diversification Opportunities for Giga Metals and FPX Nickel
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Giga and FPX is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Giga Metals Corp and FPX Nickel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FPX Nickel Corp and Giga Metals 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 Giga Metals Corp are associated (or correlated) with FPX Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FPX Nickel Corp has no effect on the direction of Giga Metals i.e., Giga Metals and FPX Nickel go up and down completely randomly.
Pair Corralation between Giga Metals and FPX Nickel
Assuming the 90 days trading horizon Giga Metals Corp is expected to under-perform the FPX Nickel. In addition to that, Giga Metals is 1.38 times more volatile than FPX Nickel Corp. It trades about -0.03 of its total potential returns per unit of risk. FPX Nickel Corp is currently generating about -0.04 per unit of volatility. If you would invest 24.00 in FPX Nickel Corp on August 25, 2024 and sell it today you would lose (6.00) from holding FPX Nickel Corp or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Giga Metals Corp vs. FPX Nickel Corp
Performance |
| Timeline |
| Giga Metals Corp |
| FPX Nickel Corp |
Giga Metals and FPX Nickel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Giga Metals and FPX Nickel
The main advantage of trading using opposite Giga Metals and FPX Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Giga Metals position performs unexpectedly, FPX 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 FPX Nickel will offset losses from the drop in FPX Nickel's long position.| Giga Metals vs. FPX Nickel Corp | Giga Metals vs. Grid Metals Corp | Giga Metals vs. Canada Nickel | Giga Metals vs. Stillwater Critical Minerals |
| FPX Nickel vs. Ascendant Resources | FPX Nickel vs. Cantex Mine Development | FPX Nickel vs. Amarc Resources | FPX Nickel vs. Sterling Metals 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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