Correlation Between Manganese and FPX Nickel

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

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

Diversification Opportunities for Manganese and FPX Nickel

0.5

Correlation Coefficient

Manganese  FPX Nickel

Very weak diversification

The 3 months correlation between Manganese and FPX is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Manganese X Energy 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 Manganese 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 Manganese X Energy 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 Manganese i.e., Manganese and FPX Nickel go up and down completely randomly.

Pair Corralation between Manganese and FPX Nickel

Assuming the 90 days horizon Manganese X Energy is expected to generate 2.33 times more return on investment than FPX Nickel. However, Manganese is 2.33 times more volatile than FPX Nickel Corp. It trades about 0.01 of its potential returns per unit of risk. FPX Nickel Corp is currently generating about -0.02 per unit of risk. If you would invest  4.10  in Manganese X Energy on September 13, 2024 and sell it today you would lose (0.95) from holding Manganese X Energy or give up 23.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Manganese X Energy  vs.  FPX Nickel Corp

Manganese X Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Manganese X Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, Manganese may actually be approaching a critical reversion point that can send shares even higher in January 2025.

FPX Nickel Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FPX Nickel Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, FPX Nickel is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Manganese and FPX Nickel

The main advantage of trading using opposite Manganese and FPX Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manganese 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 Manganese X Energy 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.