Correlation Between Fidelity National and Ryan Specialty

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

By analyzing existing cross correlation between Fidelity National Financial and Ryan Specialty Group, you can compare the effects of market volatilities on Fidelity National and Ryan Specialty 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 Ryan Specialty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity National and Ryan Specialty.

Diversification Opportunities for Fidelity National and Ryan Specialty

0.8

Correlation Coefficient

Fidelity National  Ryan Specialty

Very poor diversification

The 3 months correlation between Fidelity and Ryan is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Financial and Ryan Specialty Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ryan Specialty Group 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 Financial are associated (or correlated) with Ryan Specialty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ryan Specialty Group has no effect on the direction of Fidelity National i.e., Fidelity National and Ryan Specialty go up and down completely randomly.

Pair Corralation between Fidelity National and Ryan Specialty

Considering the 90-day investment horizon Fidelity National is expected to generate 1.01 times less return on investment than Ryan Specialty. But when comparing it to its historical volatility, Fidelity National Financial is 1.08 times less risky than Ryan Specialty. It trades about 0.07 of its potential returns per unit of risk. Ryan Specialty Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  4,150  in Ryan Specialty Group on September 30, 2024 and sell it today you would earn a total of  2,249  from holding Ryan Specialty Group or generate 54.19% return on investment over 90 days.

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

Fidelity National Financial  vs.  Ryan Specialty Group

Fidelity National

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fidelity National Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Ryan Specialty Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ryan Specialty Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Ryan Specialty is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Fidelity National and Ryan Specialty

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

The idea behind Fidelity National Financial and Ryan Specialty Group 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.