Correlation Between Fidelity National and Alfa Financial
Can any of the company-specific risk be diversified away by investing in both Fidelity National and Alfa Financial 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 Alfa Financial 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 Alfa Financial Software, you can compare the effects of market volatilities on Fidelity National and Alfa Financial 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 Alfa Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity National and Alfa Financial.
Diversification Opportunities for Fidelity National and Alfa Financial
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fidelity and Alfa is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Information and Alfa Financial Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfa Financial Software 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 Alfa Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfa Financial Software has no effect on the direction of Fidelity National i.e., Fidelity National and Alfa Financial go up and down completely randomly.
Pair Corralation between Fidelity National and Alfa Financial
Assuming the 90 days trading horizon Fidelity National Information is expected to generate 1.66 times more return on investment than Alfa Financial. However, Fidelity National is 1.66 times more volatile than Alfa Financial Software. It trades about 0.05 of its potential returns per unit of risk. Alfa Financial Software is currently generating about 0.04 per unit of risk. If you would invest 5,262 in Fidelity National Information on September 2, 2024 and sell it today you would earn a total of 3,273 from holding Fidelity National Information or generate 62.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Fidelity National Information vs. Alfa Financial Software
Performance |
| Timeline |
| Fidelity National |
| Alfa Financial Software |
Fidelity National and Alfa Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity National and Alfa Financial
The main advantage of trading using opposite Fidelity National and Alfa Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity National position performs unexpectedly, Alfa Financial 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 Alfa Financial will offset losses from the drop in Alfa Financial's long position.| Fidelity National vs. Uniper SE | Fidelity National vs. Mulberry Group PLC | Fidelity National vs. London Security Plc | Fidelity National vs. Triad Group PLC |
| Alfa Financial vs. SupplyMe Capital PLC | Alfa Financial vs. Lloyds Banking Group | Alfa Financial vs. Premier African Minerals | Alfa Financial vs. SANTANDER UK 8 |
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 CEOs Directory module to screen CEOs from public companies around the world.
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