Correlation Between Plaza Retail and FPX Nickel

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

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

Diversification Opportunities for Plaza Retail and FPX Nickel

0.19

Correlation Coefficient

Plaza Retail  FPX Nickel

Average diversification

The 3 months correlation between Plaza and FPX is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Plaza Retail REIT 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 Plaza Retail 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 Plaza Retail REIT 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 Plaza Retail i.e., Plaza Retail and FPX Nickel go up and down completely randomly.

Pair Corralation between Plaza Retail and FPX Nickel

Assuming the 90 days trading horizon Plaza Retail REIT is expected to generate 0.39 times more return on investment than FPX Nickel. However, Plaza Retail REIT is 2.56 times less risky than FPX Nickel. It trades about 0.11 of its potential returns per unit of risk. FPX Nickel Corp is currently generating about 0.04 per unit of risk. If you would invest  348.00  in Plaza Retail REIT on December 26, 2024 and sell it today you would earn a total of  28.00  from holding Plaza Retail REIT or generate 8.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Plaza Retail REIT  vs.  FPX Nickel Corp

Plaza Retail REIT

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Plaza Retail REIT are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Plaza Retail may actually be approaching a critical reversion point that can send shares even higher in April 2025.

FPX Nickel Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FPX Nickel Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, FPX Nickel may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Plaza Retail and FPX Nickel

The main advantage of trading using opposite Plaza Retail and FPX Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plaza Retail 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 Plaza Retail REIT 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.