Correlation Between Fidelity National and International Business
Can any of the company-specific risk be diversified away by investing in both Fidelity National and International Business 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 Fidelity National and International Business into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity National Information and International Business Machines, you can compare the effects of market volatilities on Fidelity National and International Business 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 Fidelity National with a short position of International Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity National and International Business.
Diversification Opportunities for Fidelity National and International Business
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and International is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Information and International Business Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Business and Fidelity National 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 Fidelity National Information are associated (or correlated) with International Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Business has no effect on the direction of Fidelity National i.e., Fidelity National and International Business go up and down completely randomly.
Pair Corralation between Fidelity National and International Business
Considering the 90-day investment horizon Fidelity National Information is expected to generate 1.45 times more return on investment than International Business. However, Fidelity National is 1.45 times more volatile than International Business Machines. It trades about -0.03 of its potential returns per unit of risk. International Business Machines is currently generating about -0.34 per unit of risk. If you would invest 7,070 in Fidelity National Information on January 20, 2024 and sell it today you would lose (70.00) from holding Fidelity National Information or give up 0.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity National Information vs. International Business Machine
Performance |
| Timeline |
| Fidelity National |
| International Business |
Fidelity National and International Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity National and International Business
The main advantage of trading using opposite Fidelity National and International Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity National position performs unexpectedly, International Business 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 International Business will offset losses from the drop in International Business' long position.| Fidelity National vs. CACI International | Fidelity National vs. CDW Corp | Fidelity National vs. Broadridge Financial Solutions | Fidelity National vs. ExlService Holdings |
| International Business vs. Information Services Group | International Business vs. Home Bancorp | International Business vs. CRA International | International Business vs. Aquagold International |
Check out your portfolio center.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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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