Correlation Between Fidelity National and New Residential
Can any of the company-specific risk be diversified away by investing in both Fidelity National and New Residential 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 New Residential 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 New Residential Investment, you can compare the effects of market volatilities on Fidelity National and New Residential 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 New Residential. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity National and New Residential.
Diversification Opportunities for Fidelity National and New Residential
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fidelity and New is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Information and New Residential Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Residential Inve 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 New Residential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Residential Inve has no effect on the direction of Fidelity National i.e., Fidelity National and New Residential go up and down completely randomly.
Pair Corralation between Fidelity National and New Residential
Assuming the 90 days trading horizon Fidelity National is expected to generate 1.63 times less return on investment than New Residential. In addition to that, Fidelity National is 1.35 times more volatile than New Residential Investment. It trades about 0.03 of its total potential returns per unit of risk. New Residential Investment is currently generating about 0.07 per unit of volatility. If you would invest 723.00 in New Residential Investment on September 1, 2024 and sell it today you would earn a total of 335.00 from holding New Residential Investment or generate 46.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity National Information vs. New Residential Investment
Performance |
| Timeline |
| Fidelity National |
| New Residential Inve |
Fidelity National and New Residential Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity National and New Residential
The main advantage of trading using opposite Fidelity National and New Residential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity National position performs unexpectedly, New Residential 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 New Residential will offset losses from the drop in New Residential's long position.| Fidelity National vs. Fukuyama Transporting Co | Fidelity National vs. DICKS Sporting Goods | Fidelity National vs. ARROW ELECTRONICS | Fidelity National vs. KIMBALL ELECTRONICS |
| New Residential vs. TRAINLINE PLC LS | New Residential vs. Soken Chemical Engineering | New Residential vs. Siamgas And Petrochemicals | New Residential vs. SEKISUI CHEMICAL |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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