Correlation Between Corporate Office and Fidelity National

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

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

Diversification Opportunities for Corporate Office and Fidelity National

0.21

Correlation Coefficient

Corporate Office  Fidelity National

Modest diversification

The 3 months correlation between Corporate and Fidelity is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Corporate Office Properties and Fidelity National Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity National and Corporate Office 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 Corporate Office Properties 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 Corporate Office i.e., Corporate Office and Fidelity National go up and down completely randomly.

Pair Corralation between Corporate Office and Fidelity National

Assuming the 90 days horizon Corporate Office Properties is expected to generate 1.13 times more return on investment than Fidelity National. However, Corporate Office is 1.13 times more volatile than Fidelity National Information. It trades about 0.01 of its potential returns per unit of risk. Fidelity National Information is currently generating about -0.02 per unit of risk. If you would invest  2,990  in Corporate Office Properties on October 7, 2024 and sell it today you would earn a total of  10.00  from holding Corporate Office Properties or generate 0.33% return on investment over 90 days.

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

Corporate Office Properties  vs.  Fidelity National Information

Corporate Office Pro

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Corporate Office Properties are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Corporate Office may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Fidelity National

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity National Information are ranked lower than 2 (%) 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 current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Corporate Office and Fidelity National

The main advantage of trading using opposite Corporate Office and Fidelity National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporate Office 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 Corporate Office Properties 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.