Correlation Between Leidos Holdings and FiscalNote Holdings

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

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

Diversification Opportunities for Leidos Holdings and FiscalNote Holdings

-0.26

Correlation Coefficient

Leidos Holdings  FiscalNote Holdings

Very good diversification

The 3 months correlation between Leidos and FiscalNote is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Leidos Holdings and FiscalNote Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FiscalNote Holdings and Leidos Holdings 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 Leidos Holdings are associated (or correlated) with FiscalNote Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FiscalNote Holdings has no effect on the direction of Leidos Holdings i.e., Leidos Holdings and FiscalNote Holdings go up and down completely randomly.

Pair Corralation between Leidos Holdings and FiscalNote Holdings

Given the investment horizon of 90 days Leidos Holdings is expected to under-perform the FiscalNote Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Leidos Holdings is 5.44 times less risky than FiscalNote Holdings. The stock trades about -0.35 of its potential returns per unit of risk. The FiscalNote Holdings is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  86.00  in FiscalNote Holdings on October 6, 2024 and sell it today you would earn a total of  18.00  from holding FiscalNote Holdings or generate 20.93% return on investment over 90 days.

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

Leidos Holdings  vs.  FiscalNote Holdings

Leidos Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Leidos Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

FiscalNote Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FiscalNote Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, FiscalNote Holdings is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Leidos Holdings and FiscalNote Holdings

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

The idea behind Leidos Holdings and FiscalNote Holdings 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.