Correlation Between Fidelity National and Premier Foods
Can any of the company-specific risk be diversified away by investing in both Fidelity National and Premier Foods 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 Premier Foods 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 Premier Foods PLC, you can compare the effects of market volatilities on Fidelity National and Premier Foods 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 Premier Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity National and Premier Foods.
Diversification Opportunities for Fidelity National and Premier Foods
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Fidelity and Premier is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Information and Premier Foods PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier Foods 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 Premier Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier Foods PLC has no effect on the direction of Fidelity National i.e., Fidelity National and Premier Foods go up and down completely randomly.
Pair Corralation between Fidelity National and Premier Foods
Assuming the 90 days trading horizon Fidelity National Information is expected to under-perform the Premier Foods. But the stock apears to be less risky and, when comparing its historical volatility, Fidelity National Information is 1.18 times less risky than Premier Foods. The stock trades about -0.33 of its potential returns per unit of risk. The Premier Foods PLC is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 18,600 in Premier Foods PLC on October 10, 2024 and sell it today you would lose (560.00) from holding Premier Foods PLC or give up 3.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Fidelity National Information vs. Premier Foods PLC
Performance |
| Timeline |
| Fidelity National |
| Premier Foods PLC |
Fidelity National and Premier Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity National and Premier Foods
The main advantage of trading using opposite Fidelity National and Premier Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity National position performs unexpectedly, Premier Foods 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 Premier Foods will offset losses from the drop in Premier Foods' long position.| Fidelity National vs. Jupiter Fund Management | Fidelity National vs. Scandinavian Tobacco Group | Fidelity National vs. JD Sports Fashion | Fidelity National vs. Applied Materials |
| Premier Foods vs. Young Cos Brewery | Premier Foods vs. Delta Air Lines | Premier Foods vs. Air Products Chemicals | Premier Foods vs. Universal Display Corp |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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