Correlation Between Fidelity National and Xp

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

Diversification Opportunities for Fidelity National and Xp

-0.79

Correlation Coefficient

Fidelity National  Xp

Pay attention - limited upside

The 3 months correlation between Fidelity and Xp is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Information and Xp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xp Inc 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 Xp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xp Inc has no effect on the direction of Fidelity National i.e., Fidelity National and Xp go up and down completely randomly.

Pair Corralation between Fidelity National and Xp

Assuming the 90 days trading horizon Fidelity National Information is expected to under-perform the Xp. But the stock apears to be less risky and, when comparing its historical volatility, Fidelity National Information is 1.0 times less risky than Xp. The stock trades about -0.12 of its potential returns per unit of risk. The Xp Inc is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  7,221  in Xp Inc on December 31, 2024 and sell it today you would earn a total of  1,321  from holding Xp Inc or generate 18.29% return on investment over 90 days.

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

Fidelity National Information  vs.  Xp Inc

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. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Xp Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Xp Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Xp sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fidelity National and Xp

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

The idea behind Fidelity National Information and Xp Inc 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 Commodity Directory module to find actively traded commodities issued by global exchanges.