Correlation Between Capital Metals and Fidelity National
Can any of the company-specific risk be diversified away by investing in both Capital Metals 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 Capital Metals and Fidelity National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Metals PLC and Fidelity National Information, you can compare the effects of market volatilities on Capital Metals 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 Capital Metals with a short position of Fidelity National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Metals and Fidelity National.
Diversification Opportunities for Capital Metals and Fidelity National
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Capital and Fidelity is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Capital Metals PLC and Fidelity National Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity National and Capital Metals 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 Capital Metals PLC 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 Capital Metals i.e., Capital Metals and Fidelity National go up and down completely randomly.
Pair Corralation between Capital Metals and Fidelity National
Assuming the 90 days trading horizon Capital Metals PLC is expected to generate 5.75 times more return on investment than Fidelity National. However, Capital Metals is 5.75 times more volatile than Fidelity National Information. It trades about 0.03 of its potential returns per unit of risk. Fidelity National Information is currently generating about -0.06 per unit of risk. If you would invest 160.00 in Capital Metals PLC on October 24, 2024 and sell it today you would earn a total of 5.00 from holding Capital Metals PLC or generate 3.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.81% |
| Values | Daily Returns |
Capital Metals PLC vs. Fidelity National Information
Performance |
| Timeline |
| Capital Metals PLC |
| Fidelity National |
Capital Metals and Fidelity National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Metals and Fidelity National
The main advantage of trading using opposite Capital Metals and Fidelity National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Metals 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.| Capital Metals vs. Infrastrutture Wireless Italiane | Capital Metals vs. G5 Entertainment AB | Capital Metals vs. Intermediate Capital Group | Capital Metals vs. AcadeMedia AB |
| Fidelity National vs. First Class Metals | Fidelity National vs. Capital Metals PLC | Fidelity National vs. Wheaton Precious Metals | Fidelity National vs. Darden Restaurants |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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