Correlation Between AXIS Capital and Fidelity National
Can any of the company-specific risk be diversified away by investing in both AXIS Capital 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 AXIS Capital and Fidelity National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AXIS Capital Holdings and Fidelity National Financial, you can compare the effects of market volatilities on AXIS Capital 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 AXIS Capital with a short position of Fidelity National. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXIS Capital and Fidelity National.
Diversification Opportunities for AXIS Capital and Fidelity National
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AXIS and Fidelity is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding AXIS Capital Holdings and Fidelity National Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity National and AXIS Capital 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 AXIS Capital Holdings 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 AXIS Capital i.e., AXIS Capital and Fidelity National go up and down completely randomly.
Pair Corralation between AXIS Capital and Fidelity National
Considering the 90-day investment horizon AXIS Capital Holdings is expected to generate 1.13 times more return on investment than Fidelity National. However, AXIS Capital is 1.13 times more volatile than Fidelity National Financial. It trades about 0.42 of its potential returns per unit of risk. Fidelity National Financial is currently generating about 0.13 per unit of risk. If you would invest 8,083 in AXIS Capital Holdings on August 31, 2024 and sell it today you would earn a total of 1,302 from holding AXIS Capital Holdings or generate 16.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AXIS Capital Holdings vs. Fidelity National Financial
Performance |
| Timeline |
| AXIS Capital Holdings |
| Fidelity National |
AXIS Capital and Fidelity National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AXIS Capital and Fidelity National
The main advantage of trading using opposite AXIS Capital and Fidelity National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXIS Capital 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.| AXIS Capital vs. Assured Guaranty | AXIS Capital vs. Enact Holdings | AXIS Capital vs. NMI Holdings | AXIS Capital vs. Radian Group |
| Fidelity National vs. AXIS Capital Holdings | Fidelity National vs. Assured Guaranty | Fidelity National vs. Enact Holdings | Fidelity National vs. NMI Holdings |
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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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