Correlation Between Apple and Fidelity National

Can any of the company-specific risk be diversified away by investing in both Apple and Fidelity National 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 Apple and Fidelity National into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Apple Inc and Fidelity National Information, you can compare the effects of market volatilities on Apple and Fidelity National 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 Apple with a short position of Fidelity National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Fidelity National.

Diversification Opportunities for Apple and Fidelity National

0.73

Correlation Coefficient

Apple  Fidelity National

Poor diversification

The 3 months correlation between Apple and Fidelity is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Fidelity National Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity National and Apple 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 Apple Inc are associated (or correlated) with Fidelity National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity National has no effect on the direction of Apple i.e., Apple and Fidelity National go up and down completely randomly.

Pair Corralation between Apple and Fidelity National

Assuming the 90 days trading horizon Apple is expected to generate 1.07 times less return on investment than Fidelity National. In addition to that, Apple is 1.22 times more volatile than Fidelity National Information. It trades about 0.1 of its total potential returns per unit of risk. Fidelity National Information is currently generating about 0.12 per unit of volatility. If you would invest  7,357  in Fidelity National Information on September 2, 2024 and sell it today you would earn a total of  667.00  from holding Fidelity National Information or generate 9.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Apple Inc  vs.  Fidelity National Information

Apple Inc

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile fundamental indicators, Apple may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Fidelity National

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity National Information are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Fidelity National may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Apple and Fidelity National

The main advantage of trading using opposite Apple and Fidelity National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Fidelity National 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 Fidelity National will offset losses from the drop in Fidelity National's long position.

The idea behind Apple Inc and Fidelity National Information pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.