Correlation Between Discover Financial and FIH MOBILE
Can any of the company-specific risk be diversified away by investing in both Discover Financial and FIH MOBILE 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 Discover Financial and FIH MOBILE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Discover Financial Services and FIH MOBILE, you can compare the effects of market volatilities on Discover Financial and FIH MOBILE 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 Discover Financial with a short position of FIH MOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Discover Financial and FIH MOBILE.
Diversification Opportunities for Discover Financial and FIH MOBILE
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Discover and FIH is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Discover Financial Services and FIH MOBILE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIH MOBILE and Discover Financial 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 Discover Financial Services are associated (or correlated) with FIH MOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIH MOBILE has no effect on the direction of Discover Financial i.e., Discover Financial and FIH MOBILE go up and down completely randomly.
Pair Corralation between Discover Financial and FIH MOBILE
If you would invest 16,594 in Discover Financial Services on October 30, 2024 and sell it today you would earn a total of 2,474 from holding Discover Financial Services or generate 14.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Discover Financial Services vs. FIH MOBILE
Performance |
| Timeline |
| Discover Financial |
| FIH MOBILE |
Discover Financial and FIH MOBILE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Discover Financial and FIH MOBILE
The main advantage of trading using opposite Discover Financial and FIH MOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Discover Financial position performs unexpectedly, FIH MOBILE 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 FIH MOBILE will offset losses from the drop in FIH MOBILE's long position.| Discover Financial vs. Visa Inc | Discover Financial vs. Mastercard | Discover Financial vs. PayPal Holdings |
| FIH MOBILE vs. NAKED WINES PLC | FIH MOBILE vs. Goodyear Tire Rubber | FIH MOBILE vs. Entravision Communications | FIH MOBILE vs. Kingdee International Software |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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