Correlation Between Fidelity National and Haleon PLC
Can any of the company-specific risk be diversified away by investing in both Fidelity National and Haleon PLC 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 Haleon PLC 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 Haleon PLC, you can compare the effects of market volatilities on Fidelity National and Haleon PLC 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 Haleon PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity National and Haleon PLC.
Diversification Opportunities for Fidelity National and Haleon PLC
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fidelity and Haleon is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Information and Haleon PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haleon PLC 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 Haleon PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haleon PLC has no effect on the direction of Fidelity National i.e., Fidelity National and Haleon PLC go up and down completely randomly.
Pair Corralation between Fidelity National and Haleon PLC
Assuming the 90 days trading horizon Fidelity National Information is expected to under-perform the Haleon PLC. In addition to that, Fidelity National is 1.14 times more volatile than Haleon PLC. It trades about -0.18 of its total potential returns per unit of risk. Haleon PLC is currently generating about 0.03 per unit of volatility. If you would invest 37,220 in Haleon PLC on September 2, 2024 and sell it today you would earn a total of 210.00 from holding Haleon PLC or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity National Information vs. Haleon PLC
Performance |
| Timeline |
| Fidelity National |
| Haleon PLC |
Fidelity National and Haleon PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity National and Haleon PLC
The main advantage of trading using opposite Fidelity National and Haleon PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity National position performs unexpectedly, Haleon PLC 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 Haleon PLC will offset losses from the drop in Haleon PLC'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 |
| Haleon PLC vs. Bankers Investment Trust | Haleon PLC vs. Diversified Energy | Haleon PLC vs. Federal Realty Investment | Haleon PLC vs. G5 Entertainment AB |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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