Correlation Between FiscalNote Holdings and Leidos Holdings

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

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

Diversification Opportunities for FiscalNote Holdings and Leidos Holdings

-0.3

Correlation Coefficient

FiscalNote Holdings  Leidos Holdings

Very good diversification

The 3 months correlation between FiscalNote and Leidos is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding FiscalNote Holdings and Leidos Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leidos Holdings and FiscalNote 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 FiscalNote Holdings are associated (or correlated) with Leidos Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leidos Holdings has no effect on the direction of FiscalNote Holdings i.e., FiscalNote Holdings and Leidos Holdings go up and down completely randomly.

Pair Corralation between FiscalNote Holdings and Leidos Holdings

Given the investment horizon of 90 days FiscalNote Holdings is expected to generate 2.48 times more return on investment than Leidos Holdings. However, FiscalNote Holdings is 2.48 times more volatile than Leidos Holdings. It trades about 0.01 of its potential returns per unit of risk. Leidos Holdings is currently generating about -0.05 per unit of risk. If you would invest  120.00  in FiscalNote Holdings on September 22, 2024 and sell it today you would lose (9.00) from holding FiscalNote Holdings or give up 7.5% of portfolio value over 90 days.

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

FiscalNote Holdings  vs.  Leidos Holdings

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.

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.

Pair Trading with FiscalNote Holdings and Leidos Holdings

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

The idea behind FiscalNote Holdings and Leidos 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.