Correlation Between Fidelity National and DAI NIPPON

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

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

Diversification Opportunities for Fidelity National and DAI NIPPON

0.06

Correlation Coefficient

Fidelity National  DAI NIPPON

Significant diversification

The 3 months correlation between Fidelity and DAI is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Information and DAI NIPPON PRINTING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAI NIPPON PRINTING and Fidelity National 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 Fidelity National Information are associated (or correlated) with DAI NIPPON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAI NIPPON PRINTING has no effect on the direction of Fidelity National i.e., Fidelity National and DAI NIPPON go up and down completely randomly.

Pair Corralation between Fidelity National and DAI NIPPON

Assuming the 90 days trading horizon Fidelity National Information is expected to generate 0.64 times more return on investment than DAI NIPPON. However, Fidelity National Information is 1.56 times less risky than DAI NIPPON. It trades about -0.01 of its potential returns per unit of risk. DAI NIPPON PRINTING is currently generating about -0.19 per unit of risk. If you would invest  7,787  in Fidelity National Information on October 9, 2024 and sell it today you would lose (59.00) from holding Fidelity National Information or give up 0.76% of portfolio value over 90 days.

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

Fidelity National Information  vs.  DAI NIPPON PRINTING

Fidelity National

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Fidelity National Information has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Fidelity National is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

DAI NIPPON PRINTING

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DAI NIPPON PRINTING has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Fidelity National and DAI NIPPON

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

The idea behind Fidelity National Information and DAI NIPPON PRINTING 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.