Correlation Between Fidelity National and CeoTronics
Can any of the company-specific risk be diversified away by investing in both Fidelity National and CeoTronics 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 CeoTronics 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 CeoTronics AG, you can compare the effects of market volatilities on Fidelity National and CeoTronics 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 CeoTronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity National and CeoTronics.
Diversification Opportunities for Fidelity National and CeoTronics
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fidelity and CeoTronics is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Information and CeoTronics AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CeoTronics 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 CeoTronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CeoTronics AG has no effect on the direction of Fidelity National i.e., Fidelity National and CeoTronics go up and down completely randomly.
Pair Corralation between Fidelity National and CeoTronics
Assuming the 90 days trading horizon Fidelity National Information is expected to under-perform the CeoTronics. But the stock apears to be less risky and, when comparing its historical volatility, Fidelity National Information is 3.3 times less risky than CeoTronics. The stock trades about -0.13 of its potential returns per unit of risk. The CeoTronics AG is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 555.00 in CeoTronics AG on September 13, 2024 and sell it today you would earn a total of 105.00 from holding CeoTronics AG or generate 18.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity National Information vs. CeoTronics AG
Performance |
| Timeline |
| Fidelity National |
| CeoTronics AG |
Fidelity National and CeoTronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity National and CeoTronics
The main advantage of trading using opposite Fidelity National and CeoTronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity National position performs unexpectedly, CeoTronics 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 CeoTronics will offset losses from the drop in CeoTronics' long position.| Fidelity National vs. Apple Inc | Fidelity National vs. Apple Inc | Fidelity National vs. Apple Inc | Fidelity National vs. Apple Inc |
| CeoTronics vs. Cisco Systems | CeoTronics vs. Nokia | CeoTronics vs. Hewlett Packard Enterprise | CeoTronics vs. Superior Plus 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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