Correlation Between Iron Mountain and Fiserv

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

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

Diversification Opportunities for Iron Mountain and Fiserv

0.7

Correlation Coefficient

Iron Mountain  Fiserv

Poor diversification

The 3 months correlation between Iron and Fiserv is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Iron Mountain Incorporated and Fiserv Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiserv Inc and Iron Mountain 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 Iron Mountain Incorporated are associated (or correlated) with Fiserv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fiserv Inc has no effect on the direction of Iron Mountain i.e., Iron Mountain and Fiserv go up and down completely randomly.

Pair Corralation between Iron Mountain and Fiserv

Assuming the 90 days trading horizon Iron Mountain is expected to generate 1.87 times less return on investment than Fiserv. In addition to that, Iron Mountain is 1.3 times more volatile than Fiserv Inc. It trades about 0.14 of its total potential returns per unit of risk. Fiserv Inc is currently generating about 0.33 per unit of volatility. If you would invest  48,771  in Fiserv Inc on September 4, 2024 and sell it today you would earn a total of  17,757  from holding Fiserv Inc or generate 36.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Iron Mountain Incorporated  vs.  Fiserv Inc

Iron Mountain

Risk-Adjusted Performance

10 of 100

OK

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

Fiserv Inc

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fiserv Inc are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, Fiserv sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Iron Mountain and Fiserv

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

The idea behind Iron Mountain Incorporated and Fiserv 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.