Correlation Between Guangdong Investment and Fidelis Insurance
Can any of the company-specific risk be diversified away by investing in both Guangdong Investment and Fidelis Insurance 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 Guangdong Investment and Fidelis Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guangdong Investment Limited and Fidelis Insurance Holdings, you can compare the effects of market volatilities on Guangdong Investment and Fidelis Insurance 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 Guangdong Investment with a short position of Fidelis Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Investment and Fidelis Insurance.
Diversification Opportunities for Guangdong Investment and Fidelis Insurance
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Guangdong and Fidelis is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Investment Limited and Fidelis Insurance Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelis Insurance and Guangdong Investment 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 Guangdong Investment Limited are associated (or correlated) with Fidelis Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelis Insurance has no effect on the direction of Guangdong Investment i.e., Guangdong Investment and Fidelis Insurance go up and down completely randomly.
Pair Corralation between Guangdong Investment and Fidelis Insurance
Assuming the 90 days horizon Guangdong Investment is expected to generate 2.41 times less return on investment than Fidelis Insurance. In addition to that, Guangdong Investment is 2.37 times more volatile than Fidelis Insurance Holdings. It trades about 0.02 of its total potential returns per unit of risk. Fidelis Insurance Holdings is currently generating about 0.11 per unit of volatility. If you would invest 1,189 in Fidelis Insurance Holdings on September 4, 2024 and sell it today you would earn a total of 835.00 from holding Fidelis Insurance Holdings or generate 70.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Investment Limited vs. Fidelis Insurance Holdings
Performance |
| Timeline |
| Guangdong Investment |
| Fidelis Insurance |
Guangdong Investment and Fidelis Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Investment and Fidelis Insurance
The main advantage of trading using opposite Guangdong Investment and Fidelis Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Investment position performs unexpectedly, Fidelis Insurance 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 Fidelis Insurance will offset losses from the drop in Fidelis Insurance's long position.| Guangdong Investment vs. Essential Utilities | Guangdong Investment vs. Guangdong Investment | Guangdong Investment vs. Anhui Conch Cement | Guangdong Investment vs. Beijing Enterprises Water |
| Fidelis Insurance vs. Yuexiu Transport Infrastructure | Fidelis Insurance vs. Old Dominion Freight | Fidelis Insurance vs. Ihuman Inc | Fidelis Insurance vs. PVH Corp |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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