Correlation Between FiscalNote Holdings and EPAM Systems
Can any of the company-specific risk be diversified away by investing in both FiscalNote Holdings 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 FiscalNote Holdings and EPAM Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FiscalNote Holdings and EPAM Systems, you can compare the effects of market volatilities on FiscalNote Holdings 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 FiscalNote Holdings with a short position of EPAM Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of FiscalNote Holdings and EPAM Systems.
Diversification Opportunities for FiscalNote Holdings and EPAM Systems
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FiscalNote and EPAM is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding FiscalNote Holdings and EPAM Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EPAM Systems and FiscalNote Holdings 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 FiscalNote Holdings 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 FiscalNote Holdings i.e., FiscalNote Holdings and EPAM Systems go up and down completely randomly.
Pair Corralation between FiscalNote Holdings and EPAM Systems
Given the investment horizon of 90 days FiscalNote Holdings is expected to under-perform the EPAM Systems. In addition to that, FiscalNote Holdings is 2.73 times more volatile than EPAM Systems. It trades about -0.02 of its total potential returns per unit of risk. EPAM Systems is currently generating about -0.01 per unit of volatility. If you would invest 34,099 in EPAM Systems on September 3, 2024 and sell it today you would lose (9,707) from holding EPAM Systems or give up 28.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FiscalNote Holdings vs. EPAM Systems
Performance |
| Timeline |
| FiscalNote Holdings |
| EPAM Systems |
FiscalNote Holdings and EPAM Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FiscalNote Holdings and EPAM Systems
The main advantage of trading using opposite FiscalNote Holdings and EPAM Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FiscalNote Holdings 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.| FiscalNote Holdings vs. Innodata | FiscalNote Holdings vs. International Business Machines | FiscalNote Holdings vs. Aurora Innovation | FiscalNote Holdings vs. BigBearai Holdings |
| EPAM Systems vs. Accenture plc | EPAM Systems vs. International Business Machines | EPAM Systems vs. ASGN Inc | EPAM Systems 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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