Correlation Between Fidelity National and Adidas AG
Can any of the company-specific risk be diversified away by investing in both Fidelity National and Adidas AG 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 Adidas AG 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 adidas AG, you can compare the effects of market volatilities on Fidelity National and Adidas AG 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 Adidas AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity National and Adidas AG.
Diversification Opportunities for Fidelity National and Adidas AG
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fidelity and Adidas is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Information and adidas AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on adidas AG 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 Adidas AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of adidas AG has no effect on the direction of Fidelity National i.e., Fidelity National and Adidas AG go up and down completely randomly.
Pair Corralation between Fidelity National and Adidas AG
Assuming the 90 days trading horizon Fidelity National Information is expected to generate 0.65 times more return on investment than Adidas AG. However, Fidelity National Information is 1.53 times less risky than Adidas AG. It trades about 0.13 of its potential returns per unit of risk. adidas AG is currently generating about -0.06 per unit of risk. If you would invest 7,514 in Fidelity National Information on September 3, 2024 and sell it today you would earn a total of 510.00 from holding Fidelity National Information or generate 6.79% 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. adidas AG
Performance |
| Timeline |
| Fidelity National |
| adidas AG |
Fidelity National and Adidas AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity National and Adidas AG
The main advantage of trading using opposite Fidelity National and Adidas AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity National position performs unexpectedly, Adidas AG 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 Adidas AG will offset losses from the drop in Adidas AG's long position.| Fidelity National vs. VIAPLAY GROUP AB | Fidelity National vs. ePlay Digital | Fidelity National vs. COLUMBIA SPORTSWEAR | Fidelity National vs. Playtech plc |
| Adidas AG vs. Deckers Outdoor | Adidas AG vs. PUMA SE | Adidas AG vs. Superior Plus Corp | Adidas AG vs. NMI 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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