Correlation Between Ridgestone Mining and FPX Nickel
Can any of the company-specific risk be diversified away by investing in both Ridgestone Mining 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 Ridgestone Mining and FPX Nickel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ridgestone Mining and FPX Nickel Corp, you can compare the effects of market volatilities on Ridgestone Mining 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 Ridgestone Mining with a short position of FPX Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ridgestone Mining and FPX Nickel.
Diversification Opportunities for Ridgestone Mining and FPX Nickel
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ridgestone and FPX is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Ridgestone Mining 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 Ridgestone Mining 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 Ridgestone Mining 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 Ridgestone Mining i.e., Ridgestone Mining and FPX Nickel go up and down completely randomly.
Pair Corralation between Ridgestone Mining and FPX Nickel
Assuming the 90 days horizon Ridgestone Mining is expected to generate 2.85 times more return on investment than FPX Nickel. However, Ridgestone Mining is 2.85 times more volatile than FPX Nickel Corp. It trades about 0.04 of its potential returns per unit of risk. FPX Nickel Corp is currently generating about 0.0 per unit of risk. If you would invest 16.00 in Ridgestone Mining on September 1, 2024 and sell it today you would lose (10.55) from holding Ridgestone Mining or give up 65.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.78% |
| Values | Daily Returns |
Ridgestone Mining vs. FPX Nickel Corp
Performance |
| Timeline |
| Ridgestone Mining |
| FPX Nickel Corp |
Ridgestone Mining and FPX Nickel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ridgestone Mining and FPX Nickel
The main advantage of trading using opposite Ridgestone Mining and FPX Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ridgestone Mining 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.| Ridgestone Mining vs. ATT Inc | Ridgestone Mining vs. Merck Company | Ridgestone Mining vs. Walt Disney | Ridgestone Mining vs. Caterpillar |
| FPX Nickel vs. South32 Limited | FPX Nickel vs. NioCorp Developments Ltd | FPX Nickel vs. HUMANA INC | FPX Nickel vs. SCOR PK |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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