Correlation Between Discover Financial and Fleetcor Technologies
Can any of the company-specific risk be diversified away by investing in both Discover Financial and Fleetcor Technologies 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 Discover Financial and Fleetcor Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Discover Financial Services and Fleetcor Technologies, you can compare the effects of market volatilities on Discover Financial and Fleetcor Technologies 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 Discover Financial with a short position of Fleetcor Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Discover Financial and Fleetcor Technologies.
Diversification Opportunities for Discover Financial and Fleetcor Technologies
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Discover and Fleetcor is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Discover Financial Services and Fleetcor Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fleetcor Technologies and Discover Financial 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 Discover Financial Services are associated (or correlated) with Fleetcor Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fleetcor Technologies has no effect on the direction of Discover Financial i.e., Discover Financial and Fleetcor Technologies go up and down completely randomly.
Pair Corralation between Discover Financial and Fleetcor Technologies
If you would invest 26,793 in Fleetcor Technologies on September 25, 2024 and sell it today you would earn a total of 0.00 from holding Fleetcor Technologies or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 4.76% |
Values | Daily Returns |
Discover Financial Services vs. Fleetcor Technologies
Performance |
Timeline |
Discover Financial |
Fleetcor Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Discover Financial and Fleetcor Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Discover Financial and Fleetcor Technologies
The main advantage of trading using opposite Discover Financial and Fleetcor Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Discover Financial position performs unexpectedly, Fleetcor Technologies 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 Fleetcor Technologies will offset losses from the drop in Fleetcor Technologies' long position.The idea behind Discover Financial Services and Fleetcor Technologies 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.Fleetcor Technologies vs. Weyco Group | Fleetcor Technologies vs. Black Hills | Fleetcor Technologies vs. Acme United | Fleetcor Technologies vs. Aegon NV ADR |
Check out your portfolio center.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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |