Correlation Between Nickel 28 and FPX Nickel

Can any of the company-specific risk be diversified away by investing in both Nickel 28 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 Nickel 28 and FPX Nickel into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nickel 28 Capital and FPX Nickel Corp, you can compare the effects of market volatilities on Nickel 28 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 Nickel 28 with a short position of FPX Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nickel 28 and FPX Nickel.

Diversification Opportunities for Nickel 28 and FPX Nickel

-0.14

Correlation Coefficient

Nickel 28  FPX Nickel

Good diversification

The 3 months correlation between Nickel and FPX is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Nickel 28 Capital 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 Nickel 28 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 Nickel 28 Capital 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 Nickel 28 i.e., Nickel 28 and FPX Nickel go up and down completely randomly.

Pair Corralation between Nickel 28 and FPX Nickel

Assuming the 90 days horizon Nickel 28 Capital is expected to generate 1.06 times more return on investment than FPX Nickel. However, Nickel 28 is 1.06 times more volatile than FPX Nickel Corp. It trades about 0.13 of its potential returns per unit of risk. FPX Nickel Corp is currently generating about -0.01 per unit of risk. If you would invest  64.00  in Nickel 28 Capital on December 20, 2024 and sell it today you would earn a total of  14.00  from holding Nickel 28 Capital or generate 21.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Nickel 28 Capital  vs.  FPX Nickel Corp

Nickel 28 Capital

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nickel 28 Capital are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Nickel 28 showed solid returns over the last few months and may actually be approaching a breakup point.

FPX Nickel Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days FPX Nickel Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, FPX Nickel is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Nickel 28 and FPX Nickel

The main advantage of trading using opposite Nickel 28 and FPX Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nickel 28 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.

The idea behind Nickel 28 Capital and FPX Nickel Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.