Correlation Between Apple and Fidelity National
Can any of the company-specific risk be diversified away by investing in both Apple and Fidelity National 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 Apple and Fidelity National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Fidelity National Information, you can compare the effects of market volatilities on Apple and Fidelity National 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 Apple with a short position of Fidelity National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Fidelity National.
Diversification Opportunities for Apple and Fidelity National
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Apple and Fidelity is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Fidelity National Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity National and Apple 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 Apple Inc are associated (or correlated) with Fidelity National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity National has no effect on the direction of Apple i.e., Apple and Fidelity National go up and down completely randomly.
Pair Corralation between Apple and Fidelity National
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.96 times more return on investment than Fidelity National. However, Apple Inc is 1.04 times less risky than Fidelity National. It trades about -0.02 of its potential returns per unit of risk. Fidelity National Information is currently generating about -0.33 per unit of risk. If you would invest 6,675 in Apple Inc on August 27, 2024 and sell it today you would lose (25.00) from holding Apple Inc or give up 0.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. Fidelity National Information
Performance |
| Timeline |
| Apple Inc |
| Fidelity National |
Apple and Fidelity National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Fidelity National
The main advantage of trading using opposite Apple and Fidelity National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Fidelity National 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 Fidelity National will offset losses from the drop in Fidelity National's long position.| Apple vs. United Airlines Holdings | Apple vs. Monster Beverage | Apple vs. Fidelity National Information | Apple vs. Marfrig Global Foods |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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