Correlation Between RTW Venture and Fidelity National

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

By analyzing existing cross correlation between RTW Venture Fund and Fidelity National Information, you can compare the effects of market volatilities on RTW Venture and Fidelity National 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 RTW Venture with a short position of Fidelity National. Check out your portfolio center. Please also check ongoing floating volatility patterns of RTW Venture and Fidelity National.

Diversification Opportunities for RTW Venture and Fidelity National

0.23

Correlation Coefficient

RTW Venture  Fidelity National

Modest diversification

The 3 months correlation between RTW and Fidelity is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding RTW Venture Fund and Fidelity National Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity National and RTW Venture 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 RTW Venture Fund are associated (or correlated) with Fidelity National. 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 RTW Venture i.e., RTW Venture and Fidelity National go up and down completely randomly.

Pair Corralation between RTW Venture and Fidelity National

Assuming the 90 days trading horizon RTW Venture Fund is expected to under-perform the Fidelity National. But the stock apears to be less risky and, when comparing its historical volatility, RTW Venture Fund is 1.15 times less risky than Fidelity National. The stock trades about -0.07 of its potential returns per unit of risk. The Fidelity National Information is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  8,222  in Fidelity National Information on September 3, 2024 and sell it today you would earn a total of  313.00  from holding Fidelity National Information or generate 3.81% return on investment over 90 days.

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

RTW Venture Fund  vs.  Fidelity National Information

RTW Venture Fund

Risk-Adjusted Performance

0 of 100

Very Weak

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

Fidelity National

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity National Information are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Fidelity National is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with RTW Venture and Fidelity National

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

The idea behind RTW Venture Fund 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.