Correlation Between Fiserv and Unisys

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

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

Diversification Opportunities for Fiserv and Unisys

-0.48

Correlation Coefficient

Fiserv  Unisys

Very good diversification

The 3 months correlation between Fiserv and Unisys is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Fiserv Inc and Unisys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unisys and Fiserv 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 Fiserv Inc are associated (or correlated) with Unisys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unisys has no effect on the direction of Fiserv i.e., Fiserv and Unisys go up and down completely randomly.

Pair Corralation between Fiserv and Unisys

Allowing for the 90-day total investment horizon Fiserv Inc is expected to generate 0.3 times more return on investment than Unisys. However, Fiserv Inc is 3.38 times less risky than Unisys. It trades about 0.07 of its potential returns per unit of risk. Unisys is currently generating about -0.01 per unit of risk. If you would invest  10,137  in Fiserv Inc on February 16, 2024 and sell it today you would earn a total of  5,369  from holding Fiserv Inc or generate 52.96% return on investment over 90 days.

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

Fiserv Inc  vs.  Unisys

Fiserv Inc

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fiserv Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Fiserv is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Unisys

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Unisys has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's forward indicators remain comparatively stable which may send shares a bit higher in June 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Fiserv and Unisys

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

The idea behind Fiserv Inc and Unisys 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.