Correlation Between FPX Nickel and American Manganese

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

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

Diversification Opportunities for FPX Nickel and American Manganese

-0.47

Correlation Coefficient

FPX Nickel  American Manganese

Very good diversification

The 3 months correlation between FPX and American is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding FPX Nickel Corp and American Manganese in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Manganese and FPX Nickel 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 FPX Nickel Corp are associated (or correlated) with American Manganese. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Manganese has no effect on the direction of FPX Nickel i.e., FPX Nickel and American Manganese go up and down completely randomly.

Pair Corralation between FPX Nickel and American Manganese

Assuming the 90 days horizon FPX Nickel is expected to generate 2.79 times less return on investment than American Manganese. But when comparing it to its historical volatility, FPX Nickel Corp is 4.79 times less risky than American Manganese. It trades about 0.04 of its potential returns per unit of risk. American Manganese is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  5.50  in American Manganese on April 22, 2025 and sell it today you would lose (1.00) from holding American Manganese or give up 18.18% of portfolio value over 90 days.

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

FPX Nickel Corp  vs.  American Manganese

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 stable basic indicators, FPX Nickel is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

American Manganese

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in American Manganese are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, American Manganese showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FPX Nickel and American Manganese

The main advantage of trading using opposite FPX Nickel and American Manganese positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FPX Nickel position performs unexpectedly, American Manganese 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 American Manganese will offset losses from the drop in American Manganese's long position.

The idea behind FPX Nickel Corp and American Manganese 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.