Correlation Between Faction Investment and FPX Nickel

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

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

Diversification Opportunities for Faction Investment and FPX Nickel

0.0

Correlation Coefficient

Faction Investment  FPX Nickel

Pay attention - limited upside

The 3 months correlation between Faction and FPX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Faction Investment Group 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 Faction Investment 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 Faction Investment Group 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 Faction Investment i.e., Faction Investment and FPX Nickel go up and down completely randomly.

Pair Corralation between Faction Investment and FPX Nickel

If you would invest  25.00  in FPX Nickel Corp on September 6, 2024 and sell it today you would earn a total of  1.00  from holding FPX Nickel Corp or generate 4.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Faction Investment Group  vs.  FPX Nickel Corp

Faction Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Faction Investment Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Faction Investment is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

FPX Nickel Corp

Risk-Adjusted Performance

2 of 100

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

Pair Trading with Faction Investment and FPX Nickel

The main advantage of trading using opposite Faction Investment and FPX Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Faction Investment 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 Faction Investment Group 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.