Correlation Between Highlight Communications and FPX Nickel
Can any of the company-specific risk be diversified away by investing in both Highlight Communications 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 Highlight Communications and FPX Nickel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highlight Communications AG and FPX Nickel Corp, you can compare the effects of market volatilities on Highlight Communications 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 Highlight Communications with a short position of FPX Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highlight Communications and FPX Nickel.
Diversification Opportunities for Highlight Communications and FPX Nickel
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Highlight and FPX is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Highlight Communications AG 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 Highlight Communications 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 Highlight Communications AG 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 Highlight Communications i.e., Highlight Communications and FPX Nickel go up and down completely randomly.
Pair Corralation between Highlight Communications and FPX Nickel
Assuming the 90 days trading horizon Highlight Communications AG is expected to under-perform the FPX Nickel. But the stock apears to be less risky and, when comparing its historical volatility, Highlight Communications AG is 1.4 times less risky than FPX Nickel. The stock trades about -0.1 of its potential returns per unit of risk. The FPX Nickel Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 16.00 in FPX Nickel Corp on September 12, 2024 and sell it today you would earn a total of 0.00 from holding FPX Nickel Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highlight Communications AG vs. FPX Nickel Corp
Performance |
| Timeline |
| Highlight Communications |
| FPX Nickel Corp |
Highlight Communications and FPX Nickel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highlight Communications and FPX Nickel
The main advantage of trading using opposite Highlight Communications and FPX Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highlight Communications 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.| Highlight Communications vs. Solstad Offshore ASA | Highlight Communications vs. SBM OFFSHORE | Highlight Communications vs. Ares Management Corp | Highlight Communications vs. TOREX SEMICONDUCTOR LTD |
| FPX Nickel vs. Highlight Communications AG | FPX Nickel vs. SPORT LISBOA E | FPX Nickel vs. Big 5 Sporting | FPX Nickel vs. Entravision Communications |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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