Correlation Between Richelieu Hardware and FPX Nickel
Can any of the company-specific risk be diversified away by investing in both Richelieu Hardware 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 Richelieu Hardware and FPX Nickel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Richelieu Hardware and FPX Nickel Corp, you can compare the effects of market volatilities on Richelieu Hardware 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 Richelieu Hardware with a short position of FPX Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Richelieu Hardware and FPX Nickel.
Diversification Opportunities for Richelieu Hardware and FPX Nickel
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Richelieu and FPX is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Richelieu Hardware 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 Richelieu Hardware 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 Richelieu Hardware 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 Richelieu Hardware i.e., Richelieu Hardware and FPX Nickel go up and down completely randomly.
Pair Corralation between Richelieu Hardware and FPX Nickel
Assuming the 90 days trading horizon Richelieu Hardware is expected to generate 0.37 times more return on investment than FPX Nickel. However, Richelieu Hardware is 2.74 times less risky than FPX Nickel. It trades about 0.01 of its potential returns per unit of risk. FPX Nickel Corp is currently generating about -0.03 per unit of risk. If you would invest 3,892 in Richelieu Hardware on September 12, 2024 and sell it today you would lose (7.00) from holding Richelieu Hardware or give up 0.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Richelieu Hardware vs. FPX Nickel Corp
Performance |
| Timeline |
| Richelieu Hardware |
| FPX Nickel Corp |
Richelieu Hardware and FPX Nickel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Richelieu Hardware and FPX Nickel
The main advantage of trading using opposite Richelieu Hardware and FPX Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Richelieu Hardware 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.| Richelieu Hardware vs. Stella Jones | Richelieu Hardware vs. Winpak | Richelieu Hardware vs. Stantec | Richelieu Hardware vs. Gildan Activewear |
| FPX Nickel vs. Altair Resources | FPX Nickel vs. Rubicon Organics | FPX Nickel vs. Sparx Technology | FPX Nickel vs. Queens Road Capital |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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