Correlation Between Fidelity National and SPDR Gold
Can any of the company-specific risk be diversified away by investing in both Fidelity National and SPDR Gold 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 SPDR Gold 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 SPDR Gold Shares, you can compare the effects of market volatilities on Fidelity National and SPDR Gold 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 SPDR Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity National and SPDR Gold.
Diversification Opportunities for Fidelity National and SPDR Gold
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and SPDR is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Information and SPDR Gold Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Gold Shares 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 SPDR Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Gold Shares has no effect on the direction of Fidelity National i.e., Fidelity National and SPDR Gold go up and down completely randomly.
Pair Corralation between Fidelity National and SPDR Gold
Assuming the 90 days trading horizon Fidelity National is expected to generate 1.23 times less return on investment than SPDR Gold. In addition to that, Fidelity National is 2.15 times more volatile than SPDR Gold Shares. It trades about 0.04 of its total potential returns per unit of risk. SPDR Gold Shares is currently generating about 0.1 per unit of volatility. If you would invest 15,581 in SPDR Gold Shares on September 5, 2024 and sell it today you would earn a total of 7,621 from holding SPDR Gold Shares or generate 48.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
Fidelity National Information vs. SPDR Gold Shares
Performance |
| Timeline |
| Fidelity National |
| SPDR Gold Shares |
Fidelity National and SPDR Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity National and SPDR Gold
The main advantage of trading using opposite Fidelity National and SPDR Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity National position performs unexpectedly, SPDR Gold 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 SPDR Gold will offset losses from the drop in SPDR Gold's long position.| Fidelity National vs. Apple Inc | Fidelity National vs. Apple Inc | Fidelity National vs. Apple Inc | Fidelity National vs. Apple Inc |
| SPDR Gold vs. SINGAPORE AIRLINES | SPDR Gold vs. DATAGROUP SE | SPDR Gold vs. Fidelity National Information | SPDR Gold vs. PUBLIC STORAGE PRFO |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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