Correlation Between Fiserv, and ProtoSource

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

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

Diversification Opportunities for Fiserv, and ProtoSource

-0.58

Correlation Coefficient

Fiserv,  ProtoSource

Excellent diversification

The 3 months correlation between Fiserv, and ProtoSource is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Fiserv, and ProtoSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProtoSource and Fiserv, 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 Fiserv, are associated (or correlated) with ProtoSource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProtoSource has no effect on the direction of Fiserv, i.e., Fiserv, and ProtoSource go up and down completely randomly.

Pair Corralation between Fiserv, and ProtoSource

If you would invest  17,363  in Fiserv, on September 12, 2024 and sell it today you would earn a total of  2,791  from holding Fiserv, or generate 16.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Fiserv,  vs.  ProtoSource

Fiserv,

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fiserv, are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Fiserv, demonstrated solid returns over the last few months and may actually be approaching a breakup point.

ProtoSource

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ProtoSource has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, ProtoSource is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Fiserv, and ProtoSource

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

The idea behind Fiserv, and ProtoSource 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.

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.