Correlation Between Fidelity National and NESTE OYJ
Can any of the company-specific risk be diversified away by investing in both Fidelity National and NESTE OYJ 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 NESTE OYJ 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 NESTE OYJ UNSPADR, you can compare the effects of market volatilities on Fidelity National and NESTE OYJ 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 NESTE OYJ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity National and NESTE OYJ.
Diversification Opportunities for Fidelity National and NESTE OYJ
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fidelity and NESTE is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Information and NESTE OYJ UNSPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NESTE OYJ UNSPADR 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 NESTE OYJ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NESTE OYJ UNSPADR has no effect on the direction of Fidelity National i.e., Fidelity National and NESTE OYJ go up and down completely randomly.
Pair Corralation between Fidelity National and NESTE OYJ
Assuming the 90 days trading horizon Fidelity National Information is expected to under-perform the NESTE OYJ. But the stock apears to be less risky and, when comparing its historical volatility, Fidelity National Information is 4.22 times less risky than NESTE OYJ. The stock trades about -0.17 of its potential returns per unit of risk. The NESTE OYJ UNSPADR is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 540.00 in NESTE OYJ UNSPADR on October 24, 2024 and sell it today you would earn a total of 95.00 from holding NESTE OYJ UNSPADR or generate 17.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Fidelity National Information vs. NESTE OYJ UNSPADR
Performance |
| Timeline |
| Fidelity National |
| NESTE OYJ UNSPADR |
Fidelity National and NESTE OYJ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity National and NESTE OYJ
The main advantage of trading using opposite Fidelity National and NESTE OYJ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity National position performs unexpectedly, NESTE OYJ 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 NESTE OYJ will offset losses from the drop in NESTE OYJ's long position.| Fidelity National vs. Yanzhou Coal Mining | Fidelity National vs. Globex Mining Enterprises | Fidelity National vs. United Rentals | Fidelity National vs. Monument Mining Limited |
| NESTE OYJ vs. Costco Wholesale Corp | NESTE OYJ vs. Burlington Stores | NESTE OYJ vs. Boyd Gaming | NESTE OYJ vs. PICKN PAY STORES |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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