Correlation Between Fidelity National and Insulet
Can any of the company-specific risk be diversified away by investing in both Fidelity National and Insulet 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 Insulet 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 Insulet, you can compare the effects of market volatilities on Fidelity National and Insulet 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 Insulet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity National and Insulet.
Diversification Opportunities for Fidelity National and Insulet
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fidelity and Insulet is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Information and Insulet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insulet 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 Insulet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insulet has no effect on the direction of Fidelity National i.e., Fidelity National and Insulet go up and down completely randomly.
Pair Corralation between Fidelity National and Insulet
Assuming the 90 days trading horizon Fidelity National Information is expected to generate 0.54 times more return on investment than Insulet. However, Fidelity National Information is 1.84 times less risky than Insulet. It trades about -0.11 of its potential returns per unit of risk. Insulet is currently generating about -0.06 per unit of risk. If you would invest 7,953 in Fidelity National Information on September 25, 2024 and sell it today you would lose (185.00) from holding Fidelity National Information or give up 2.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Fidelity National Information vs. Insulet
Performance |
| Timeline |
| Fidelity National |
| Insulet |
Fidelity National and Insulet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity National and Insulet
The main advantage of trading using opposite Fidelity National and Insulet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity National position performs unexpectedly, Insulet 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 Insulet will offset losses from the drop in Insulet's long position.| Fidelity National vs. Apple Inc | Fidelity National vs. Apple Inc | Fidelity National vs. Apple Inc | Fidelity National vs. Apple Inc |
| Insulet vs. DATANG INTL POW | Insulet vs. Fidelity National Information | Insulet vs. MagnaChip Semiconductor Corp | Insulet vs. Datang International Power |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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