Correlation Between Science Applications and Fidelity National

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

By analyzing existing cross correlation between Science Applications International and Fidelity National Information, you can compare the effects of market volatilities on Science Applications and Fidelity National 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 Science Applications with a short position of Fidelity National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Science Applications and Fidelity National.

Diversification Opportunities for Science Applications and Fidelity National

0.93

Correlation Coefficient

Science Applications  Fidelity National

Almost no diversification

The 3 months correlation between Science and Fidelity is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Science Applications Internati and Fidelity National Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity National and Science Applications 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 Science Applications International are associated (or correlated) with Fidelity National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity National has no effect on the direction of Science Applications i.e., Science Applications and Fidelity National go up and down completely randomly.

Pair Corralation between Science Applications and Fidelity National

Given the investment horizon of 90 days Science Applications International is expected to generate 0.65 times more return on investment than Fidelity National. However, Science Applications International is 1.53 times less risky than Fidelity National. It trades about 0.05 of its potential returns per unit of risk. Fidelity National Information is currently generating about 0.03 per unit of risk. If you would invest  10,567  in Science Applications International on July 20, 2024 and sell it today you would earn a total of  4,152  from holding Science Applications International or generate 39.29% return on investment over 90 days.

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

Science Applications Internati  vs.  Fidelity National Information

Science Applications

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Science Applications International are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak forward indicators, Science Applications exhibited solid returns over the last few months and may actually be approaching a breakup point.

Fidelity National

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity National Information are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent forward indicators, Fidelity National unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Science Applications and Fidelity National

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

The idea behind Science Applications International and Fidelity National Information 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.