Correlation Between Fidelity National and Strats SM
Can any of the company-specific risk be diversified away by investing in both Fidelity National and Strats SM 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 Strats SM 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 Strats SM Trust, you can compare the effects of market volatilities on Fidelity National and Strats SM 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 Strats SM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity National and Strats SM.
Diversification Opportunities for Fidelity National and Strats SM
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fidelity and Strats is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Information and Strats SM Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strats SM Trust 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 Strats SM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strats SM Trust has no effect on the direction of Fidelity National i.e., Fidelity National and Strats SM go up and down completely randomly.
Pair Corralation between Fidelity National and Strats SM
Considering the 90-day investment horizon Fidelity National Information is expected to under-perform the Strats SM. In addition to that, Fidelity National is 2.75 times more volatile than Strats SM Trust. It trades about -0.19 of its total potential returns per unit of risk. Strats SM Trust is currently generating about -0.07 per unit of volatility. If you would invest 2,510 in Strats SM Trust on September 4, 2024 and sell it today you would lose (17.50) from holding Strats SM Trust or give up 0.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity National Information vs. Strats SM Trust
Performance |
| Timeline |
| Fidelity National |
| Strats SM Trust |
Fidelity National and Strats SM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity National and Strats SM
The main advantage of trading using opposite Fidelity National and Strats SM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity National position performs unexpectedly, Strats SM 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 Strats SM will offset losses from the drop in Strats SM's long position.| Fidelity National vs. Jack Henry Associates | Fidelity National vs. Cognizant Technology Solutions | Fidelity National vs. CDW Corp | Fidelity National vs. Gartner |
| Strats SM vs. STRATS SM Trust | Strats SM vs. STRATS SM Trust | Strats SM vs. Strats SM Trust | Strats SM vs. STRATSSM Certificates series |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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