Correlation Between Fidelity National and EPAM Systems
Can any of the company-specific risk be diversified away by investing in both Fidelity National and EPAM Systems 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 EPAM Systems 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 EPAM Systems, you can compare the effects of market volatilities on Fidelity National and EPAM Systems 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 EPAM Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity National and EPAM Systems.
Diversification Opportunities for Fidelity National and EPAM Systems
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Fidelity and EPAM is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Information and EPAM Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EPAM Systems 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 EPAM Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EPAM Systems has no effect on the direction of Fidelity National i.e., Fidelity National and EPAM Systems go up and down completely randomly.
Pair Corralation between Fidelity National and EPAM Systems
Considering the 90-day investment horizon Fidelity National is expected to generate 2.45 times less return on investment than EPAM Systems. But when comparing it to its historical volatility, Fidelity National Information is 2.08 times less risky than EPAM Systems. It trades about 0.1 of its potential returns per unit of risk. EPAM Systems is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 17,727 in EPAM Systems on August 24, 2024 and sell it today you would earn a total of 6,795 from holding EPAM Systems or generate 38.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity National Information vs. EPAM Systems
Performance |
| Timeline |
| Fidelity National |
| EPAM Systems |
Fidelity National and EPAM Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity National and EPAM Systems
The main advantage of trading using opposite Fidelity National and EPAM Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity National position performs unexpectedly, EPAM Systems 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 EPAM Systems will offset losses from the drop in EPAM Systems' long position.| Fidelity National vs. Jack Henry Associates | Fidelity National vs. Cognizant Technology Solutions | Fidelity National vs. CDW Corp | Fidelity National vs. Gartner |
| EPAM Systems vs. Concentrix | EPAM Systems vs. Gartner | EPAM Systems vs. Accenture plc | EPAM Systems vs. International Business Machines |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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