Correlation Between HP and FIDELITY

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

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

Diversification Opportunities for HP and FIDELITY

-0.01

Correlation Coefficient

HP  FIDELITY

Good diversification

The 3 months correlation between HP and FIDELITY is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding HP Inc and FIDELITY NATIONAL INFORMATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIDELITY NATIONAL and HP 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 HP Inc are associated (or correlated) with FIDELITY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIDELITY NATIONAL has no effect on the direction of HP i.e., HP and FIDELITY go up and down completely randomly.

Pair Corralation between HP and FIDELITY

Considering the 90-day investment horizon HP Inc is expected to under-perform the FIDELITY. In addition to that, HP is 3.97 times more volatile than FIDELITY NATIONAL INFORMATION. It trades about -0.14 of its total potential returns per unit of risk. FIDELITY NATIONAL INFORMATION is currently generating about 0.15 per unit of volatility. If you would invest  8,496  in FIDELITY NATIONAL INFORMATION on December 29, 2024 and sell it today you would earn a total of  279.00  from holding FIDELITY NATIONAL INFORMATION or generate 3.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	83.61%
Values	Daily Returns

HP Inc  vs.  FIDELITY NATIONAL INFORMATION

HP Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days HP Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

FIDELITY NATIONAL

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in FIDELITY NATIONAL INFORMATION are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, FIDELITY is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with HP and FIDELITY

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

The idea behind HP Inc and FIDELITY NATIONAL INFORMATION 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.