Correlation Between Ritchie Bros and FPX Nickel
Can any of the company-specific risk be diversified away by investing in both Ritchie Bros 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 Ritchie Bros and FPX Nickel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ritchie Bros Auctioneers and FPX Nickel Corp, you can compare the effects of market volatilities on Ritchie Bros 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 Ritchie Bros with a short position of FPX Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ritchie Bros and FPX Nickel.
Diversification Opportunities for Ritchie Bros and FPX Nickel
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ritchie and FPX is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Ritchie Bros Auctioneers 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 Ritchie Bros 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 Ritchie Bros Auctioneers 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 Ritchie Bros i.e., Ritchie Bros and FPX Nickel go up and down completely randomly.
Pair Corralation between Ritchie Bros and FPX Nickel
Assuming the 90 days trading horizon Ritchie Bros Auctioneers is expected to generate 0.43 times more return on investment than FPX Nickel. However, Ritchie Bros Auctioneers is 2.34 times less risky than FPX Nickel. It trades about 0.56 of its potential returns per unit of risk. FPX Nickel Corp is currently generating about -0.1 per unit of risk. If you would invest 11,772 in Ritchie Bros Auctioneers on September 1, 2024 and sell it today you would earn a total of 2,062 from holding Ritchie Bros Auctioneers or generate 17.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ritchie Bros Auctioneers vs. FPX Nickel Corp
Performance |
| Timeline |
| Ritchie Bros Auctioneers |
| FPX Nickel Corp |
Ritchie Bros and FPX Nickel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ritchie Bros and FPX Nickel
The main advantage of trading using opposite Ritchie Bros and FPX Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ritchie Bros 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.| Ritchie Bros vs. Toromont Industries | Ritchie Bros vs. Stantec | Ritchie Bros vs. Finning International | Ritchie Bros vs. FirstService Corp |
| FPX Nickel vs. Datable Technology Corp | FPX Nickel vs. Perseus Mining | FPX Nickel vs. Quipt Home Medical | FPX Nickel vs. Eddy Smart Home |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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