Correlation Between EPAM Systems and Fiserv,

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

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

Diversification Opportunities for EPAM Systems and Fiserv,

0.71

Correlation Coefficient

EPAM Systems  Fiserv,

Poor diversification

The 3 months correlation between EPAM and Fiserv, is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding EPAM Systems and Fiserv, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiserv, and EPAM Systems 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 EPAM Systems are associated (or correlated) with Fiserv,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fiserv, has no effect on the direction of EPAM Systems i.e., EPAM Systems and Fiserv, go up and down completely randomly.

Pair Corralation between EPAM Systems and Fiserv,

Given the investment horizon of 90 days EPAM Systems is expected to generate 3.52 times less return on investment than Fiserv,. In addition to that, EPAM Systems is 2.34 times more volatile than Fiserv,. It trades about 0.02 of its total potential returns per unit of risk. Fiserv, is currently generating about 0.15 per unit of volatility. If you would invest  11,909  in Fiserv, on September 12, 2024 and sell it today you would earn a total of  8,488  from holding Fiserv, or generate 71.27% return on investment over 90 days.

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

EPAM Systems  vs.  Fiserv,

EPAM Systems

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in EPAM Systems are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, EPAM Systems displayed solid returns over the last few months and may actually be approaching a breakup point.

Fiserv,

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fiserv, are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Fiserv, demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EPAM Systems and Fiserv,

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

The idea behind EPAM Systems and Fiserv, 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..