Correlation Between Fidelity National and Appen
Can any of the company-specific risk be diversified away by investing in both Fidelity National and Appen 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 Appen 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 Appen Limited, you can compare the effects of market volatilities on Fidelity National and Appen 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 Appen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity National and Appen.
Diversification Opportunities for Fidelity National and Appen
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Appen is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Information and Appen Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Appen Limited 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 Appen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Appen Limited has no effect on the direction of Fidelity National i.e., Fidelity National and Appen go up and down completely randomly.
Pair Corralation between Fidelity National and Appen
Considering the 90-day investment horizon Fidelity National is expected to generate 18.49 times less return on investment than Appen. But when comparing it to its historical volatility, Fidelity National Information is 14.84 times less risky than Appen. It trades about 0.1 of its potential returns per unit of risk. Appen Limited is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 40.00 in Appen Limited on August 24, 2024 and sell it today you would earn a total of 140.00 from holding Appen Limited or generate 350.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity National Information vs. Appen Limited
Performance |
| Timeline |
| Fidelity National |
| Appen Limited |
Fidelity National and Appen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity National and Appen
The main advantage of trading using opposite Fidelity National and Appen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity National position performs unexpectedly, Appen 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 Appen will offset losses from the drop in Appen's long position.| Fidelity National vs. Jack Henry Associates | Fidelity National vs. Cognizant Technology Solutions | Fidelity National vs. CDW Corp | Fidelity National vs. Gartner |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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