Correlation Between Fidelity National and Wipro Limited

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

Diversification Opportunities for Fidelity National and Wipro Limited

0.5

Correlation Coefficient

Fidelity National  Wipro Limited

Very weak diversification

The 3 months correlation between Fidelity and Wipro is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Information and Wipro Limited ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wipro Limited ADR 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 Wipro Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wipro Limited ADR has no effect on the direction of Fidelity National i.e., Fidelity National and Wipro Limited go up and down completely randomly.

Pair Corralation between Fidelity National and Wipro Limited

Considering the 90-day investment horizon Fidelity National Information is expected to generate 1.11 times more return on investment than Wipro Limited. However, Fidelity National is 1.11 times more volatile than Wipro Limited ADR. It trades about -0.06 of its potential returns per unit of risk. Wipro Limited ADR is currently generating about -0.12 per unit of risk. 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

Fidelity National Information  vs.  Wipro Limited ADR

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.

Wipro Limited ADR

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wipro Limited ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's forward indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Fidelity National and Wipro Limited

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

The idea behind Fidelity National Information and Wipro Limited ADR 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 CEOs Directory module to screen CEOs from public companies around the world.