Correlation Between Fidelity National and James River
Can any of the company-specific risk be diversified away by investing in both Fidelity National and James River 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 James River into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity National Financial and James River Group, you can compare the effects of market volatilities on Fidelity National and James River 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 James River. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity National and James River.
Diversification Opportunities for Fidelity National and James River
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fidelity and James is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Financial and James River Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on James River Group 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 Financial are associated (or correlated) with James River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of James River Group has no effect on the direction of Fidelity National i.e., Fidelity National and James River go up and down completely randomly.
Pair Corralation between Fidelity National and James River
Considering the 90-day investment horizon Fidelity National Financial is expected to generate 0.21 times more return on investment than James River. However, Fidelity National Financial is 4.69 times less risky than James River. It trades about 0.27 of its potential returns per unit of risk. James River Group is currently generating about -0.18 per unit of risk. If you would invest 5,880 in Fidelity National Financial on September 2, 2024 and sell it today you would earn a total of 459.00 from holding Fidelity National Financial or generate 7.81% 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 Financial vs. James River Group
Performance |
| Timeline |
| Fidelity National |
| James River Group |
Fidelity National and James River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity National and James River
The main advantage of trading using opposite Fidelity National and James River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity National position performs unexpectedly, James River 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 James River will offset losses from the drop in James River's long position.| Fidelity National vs. AXIS Capital Holdings | Fidelity National vs. Assured Guaranty | Fidelity National vs. Enact Holdings | Fidelity National vs. NMI Holdings |
| James River vs. Employers Holdings | James River vs. AMERISAFE | James River vs. NMI Holdings | James River vs. Investors Title |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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