Correlation Between EPAM Systems and Fidelity National

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

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

Diversification Opportunities for EPAM Systems and Fidelity National

0.49

Correlation Coefficient

EPAM Systems  Fidelity National

Very weak diversification

The 3 months correlation between EPAM and Fidelity is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding EPAM Systems and Fidelity National Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity National 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 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 EPAM Systems i.e., EPAM Systems and Fidelity National go up and down completely randomly.

Pair Corralation between EPAM Systems and Fidelity National

Given the investment horizon of 90 days EPAM Systems is expected to under-perform the Fidelity National. In addition to that, EPAM Systems is 1.29 times more volatile than Fidelity National Information. It trades about -0.2 of its total potential returns per unit of risk. Fidelity National Information is currently generating about -0.06 per unit of volatility. If you would invest  8,014  in Fidelity National Information on December 28, 2024 and sell it today you would lose (649.00) from holding Fidelity National Information or give up 8.1% of portfolio value over 90 days.

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

EPAM Systems  vs.  Fidelity National Information

EPAM Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days EPAM Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Fidelity National

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fidelity National Information has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's forward indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with EPAM Systems and Fidelity National

The main advantage of trading using opposite EPAM Systems and Fidelity National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPAM Systems 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 EPAM Systems 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.

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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 Anywhere module to track or share privately all of your investments from the convenience of any device.