Correlation Between Fidelity National and Uniper SE
Can any of the company-specific risk be diversified away by investing in both Fidelity National and Uniper SE 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 Uniper SE 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 Uniper SE, you can compare the effects of market volatilities on Fidelity National and Uniper SE 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 Uniper SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity National and Uniper SE.
Diversification Opportunities for Fidelity National and Uniper SE
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fidelity and Uniper is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Information and Uniper SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniper SE 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 Uniper SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uniper SE has no effect on the direction of Fidelity National i.e., Fidelity National and Uniper SE go up and down completely randomly.
Pair Corralation between Fidelity National and Uniper SE
Assuming the 90 days trading horizon Fidelity National Information is expected to generate 1.46 times more return on investment than Uniper SE. However, Fidelity National is 1.46 times more volatile than Uniper SE. It trades about 0.04 of its potential returns per unit of risk. Uniper SE is currently generating about -0.07 per unit of risk. If you would invest 4,994 in Fidelity National Information on November 28, 2024 and sell it today you would earn a total of 1,921 from holding Fidelity National Information or generate 38.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.19% |
| Values | Daily Returns |
Fidelity National Information vs. Uniper SE
Performance |
| Timeline |
| Fidelity National |
| Uniper SE |
Fidelity National and Uniper SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity National and Uniper SE
The main advantage of trading using opposite Fidelity National and Uniper SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity National position performs unexpectedly, Uniper SE 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 Uniper SE will offset losses from the drop in Uniper SE's long position.| Fidelity National vs. Gamma Communications PLC | Fidelity National vs. Charter Communications Cl | Fidelity National vs. Ecclesiastical Insurance Office | Fidelity National vs. Fonix Mobile plc |
| Uniper SE vs. Tata Steel Limited | Uniper SE vs. SBM Offshore NV | Uniper SE vs. Fresenius Medical Care | Uniper SE vs. BW Offshore |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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