Correlation Between East Side and FPX Nickel

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Can any of the company-specific risk be diversified away by investing in both East Side 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 East Side and FPX Nickel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between East Side Games and FPX Nickel Corp, you can compare the effects of market volatilities on East Side 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 East Side with a short position of FPX Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of East Side and FPX Nickel.

Diversification Opportunities for East Side and FPX Nickel

0.44
  Correlation Coefficient

Very weak diversification

The 3 months correlation between East and FPX is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding East Side Games 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 East Side 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 East Side Games 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 East Side i.e., East Side and FPX Nickel go up and down completely randomly.

Pair Corralation between East Side and FPX Nickel

Assuming the 90 days trading horizon East Side Games is expected to generate 1.41 times more return on investment than FPX Nickel. However, East Side is 1.41 times more volatile than FPX Nickel Corp. It trades about -0.05 of its potential returns per unit of risk. FPX Nickel Corp is currently generating about -0.09 per unit of risk. If you would invest  71.00  in East Side Games on September 6, 2024 and sell it today you would lose (5.00) from holding East Side Games or give up 7.04% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

East Side Games  vs.  FPX Nickel Corp

 Performance 
       Timeline  
East Side Games 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days East Side Games has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.
FPX Nickel Corp 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
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 weak basic indicators, FPX Nickel may actually be approaching a critical reversion point that can send shares even higher in January 2025.

East Side and FPX Nickel Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with East Side and FPX Nickel

The main advantage of trading using opposite East Side and FPX Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East Side 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 East Side Games 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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