Correlation Between Fiserv and Global Payments

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

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

Diversification Opportunities for Fiserv and Global Payments

0.15

Correlation Coefficient

Fiserv  Global Payments

Average diversification

The 3 months correlation between Fiserv and Global is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Fiserv Inc and Global Payments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Payments and Fiserv 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 Fiserv Inc are associated (or correlated) with Global Payments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Payments has no effect on the direction of Fiserv i.e., Fiserv and Global Payments go up and down completely randomly.

Pair Corralation between Fiserv and Global Payments

Assuming the 90 days horizon Fiserv Inc is expected to generate 0.94 times more return on investment than Global Payments. However, Fiserv Inc is 1.07 times less risky than Global Payments. It trades about 0.03 of its potential returns per unit of risk. Global Payments is currently generating about -0.12 per unit of risk. If you would invest  19,824  in Fiserv Inc on December 29, 2024 and sell it today you would earn a total of  461.00  from holding Fiserv Inc or generate 2.33% return on investment over 90 days.

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

Fiserv Inc  vs.  Global Payments

Fiserv Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fiserv Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Fiserv is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Global Payments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Global Payments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Fiserv and Global Payments

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

The idea behind Fiserv Inc and Global Payments 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 Stocks Directory module to find actively traded stocks across global markets.