Correlation Between Fidelity National and United Utilities
Can any of the company-specific risk be diversified away by investing in both Fidelity National and United Utilities 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 United Utilities 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 United Utilities Group, you can compare the effects of market volatilities on Fidelity National and United Utilities 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 United Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity National and United Utilities.
Diversification Opportunities for Fidelity National and United Utilities
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fidelity and United is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Information and United Utilities Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Utilities 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 United Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Utilities has no effect on the direction of Fidelity National i.e., Fidelity National and United Utilities go up and down completely randomly.
Pair Corralation between Fidelity National and United Utilities
Assuming the 90 days trading horizon Fidelity National Information is expected to generate 0.34 times more return on investment than United Utilities. However, Fidelity National Information is 2.93 times less risky than United Utilities. It trades about -0.17 of its potential returns per unit of risk. United Utilities Group is currently generating about -0.1 per unit of risk. If you would invest 7,768 in Fidelity National Information on October 24, 2024 and sell it today you would lose (193.00) from holding Fidelity National Information or give up 2.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity National Information vs. United Utilities Group
Performance |
| Timeline |
| Fidelity National |
| United Utilities |
Fidelity National and United Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity National and United Utilities
The main advantage of trading using opposite Fidelity National and United Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity National position performs unexpectedly, United Utilities 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 United Utilities will offset losses from the drop in United Utilities' 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 |
| United Utilities vs. CN MODERN DAIRY | United Utilities vs. AUSNUTRIA DAIRY | United Utilities vs. X FAB Silicon Foundries | United Utilities vs. Easy Software AG |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |