Correlation Between Fidelity National and Tyson Foods

Can any of the company-specific risk be diversified away by investing in both Fidelity National and Tyson Foods 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 Tyson Foods 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 Tyson Foods, you can compare the effects of market volatilities on Fidelity National and Tyson Foods 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 Tyson Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity National and Tyson Foods.

Diversification Opportunities for Fidelity National and Tyson Foods

-0.06

Correlation Coefficient

Fidelity National  Tyson Foods

Good diversification

The 3 months correlation between Fidelity and Tyson is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Information and Tyson Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tyson Foods 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 Tyson Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tyson Foods has no effect on the direction of Fidelity National i.e., Fidelity National and Tyson Foods go up and down completely randomly.

Pair Corralation between Fidelity National and Tyson Foods

Assuming the 90 days trading horizon Fidelity National Information is expected to under-perform the Tyson Foods. But the stock apears to be less risky and, when comparing its historical volatility, Fidelity National Information is 1.54 times less risky than Tyson Foods. The stock trades about -0.01 of its potential returns per unit of risk. The Tyson Foods is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  34,034  in Tyson Foods on October 7, 2024 and sell it today you would earn a total of  1,786  from holding Tyson Foods or generate 5.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	92.11%
Values	Daily Returns

Fidelity National Information  vs.  Tyson Foods

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. Despite somewhat weak basic indicators, Fidelity National may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Tyson Foods

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tyson Foods are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Tyson Foods may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Fidelity National and Tyson Foods

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

The idea behind Fidelity National Information and Tyson Foods 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..