Correlation Between Fidelity National and Electronic Arts
Can any of the company-specific risk be diversified away by investing in both Fidelity National and Electronic Arts 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 Electronic Arts 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 Electronic Arts, you can compare the effects of market volatilities on Fidelity National and Electronic Arts 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 Electronic Arts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity National and Electronic Arts.
Diversification Opportunities for Fidelity National and Electronic Arts
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fidelity and Electronic is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Information and Electronic Arts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic Arts 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 Electronic Arts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electronic Arts has no effect on the direction of Fidelity National i.e., Fidelity National and Electronic Arts go up and down completely randomly.
Pair Corralation between Fidelity National and Electronic Arts
Assuming the 90 days trading horizon Fidelity National Information is expected to generate 3.44 times more return on investment than Electronic Arts. However, Fidelity National is 3.44 times more volatile than Electronic Arts. It trades about 0.05 of its potential returns per unit of risk. Electronic Arts is currently generating about 0.06 per unit of risk. If you would invest 5,263 in Fidelity National Information on August 31, 2024 and sell it today you would earn a total of 3,313 from holding Fidelity National Information or generate 62.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Fidelity National Information vs. Electronic Arts
Performance |
| Timeline |
| Fidelity National |
| Electronic Arts |
Fidelity National and Electronic Arts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity National and Electronic Arts
The main advantage of trading using opposite Fidelity National and Electronic Arts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity National position performs unexpectedly, Electronic Arts 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 Electronic Arts will offset losses from the drop in Electronic Arts' long position.| Fidelity National vs. Neometals | Fidelity National vs. Coor Service Management | Fidelity National vs. Aeorema Communications Plc | Fidelity National vs. JLEN Environmental Assets |
| Electronic Arts vs. Neometals | Electronic Arts vs. Coor Service Management | Electronic Arts vs. Aeorema Communications Plc | Electronic Arts vs. JLEN Environmental Assets |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |