Correlation Between Fidelity National and CDW Corp
Can any of the company-specific risk be diversified away by investing in both Fidelity National and CDW Corp 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 CDW Corp 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 CDW Corp, you can compare the effects of market volatilities on Fidelity National and CDW Corp 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 CDW Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity National and CDW Corp.
Diversification Opportunities for Fidelity National and CDW Corp
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fidelity and CDW is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Information and CDW Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDW Corp 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 CDW Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDW Corp has no effect on the direction of Fidelity National i.e., Fidelity National and CDW Corp go up and down completely randomly.
Pair Corralation between Fidelity National and CDW Corp
Considering the 90-day investment horizon Fidelity National Information is expected to generate 0.61 times more return on investment than CDW Corp. However, Fidelity National Information is 1.63 times less risky than CDW Corp. It trades about 0.1 of its potential returns per unit of risk. CDW Corp is currently generating about -0.09 per unit of risk. If you would invest 7,445 in Fidelity National Information on August 24, 2024 and sell it today you would earn a total of 1,105 from holding Fidelity National Information or generate 14.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity National Information vs. CDW Corp
Performance |
| Timeline |
| Fidelity National |
| CDW Corp |
Fidelity National and CDW Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity National and CDW Corp
The main advantage of trading using opposite Fidelity National and CDW Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity National position performs unexpectedly, CDW Corp 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 CDW Corp will offset losses from the drop in CDW Corp's long position.| Fidelity National vs. Jack Henry Associates | Fidelity National vs. Cognizant Technology Solutions | Fidelity National vs. CDW Corp | Fidelity National vs. Gartner |
| CDW Corp vs. CACI International | CDW Corp vs. Jack Henry Associates | CDW Corp vs. Broadridge Financial Solutions | CDW Corp vs. ExlService 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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