Correlation Between Fidelity National and ProtoSource

Can any of the company-specific risk be diversified away by investing in both Fidelity National 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 Fidelity National and ProtoSource 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 ProtoSource, you can compare the effects of market volatilities on Fidelity National 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 Fidelity National with a short position of ProtoSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity National and ProtoSource.

Diversification Opportunities for Fidelity National and ProtoSource

-0.38

Correlation Coefficient

Fidelity National  ProtoSource

Very good diversification

The 3 months correlation between Fidelity and ProtoSource is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Information and ProtoSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProtoSource 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 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 Fidelity National i.e., Fidelity National and ProtoSource go up and down completely randomly.

Pair Corralation between Fidelity National and ProtoSource

If you would invest  8,389  in Fidelity National Information on September 12, 2024 and sell it today you would earn a total of  94.00  from holding Fidelity National Information or generate 1.12% return on investment over 90 days.

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

Fidelity National Information  vs.  ProtoSource

Fidelity National

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity National Information are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable forward 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.

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 Fidelity National and ProtoSource

The main advantage of trading using opposite Fidelity National and ProtoSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity National 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 Fidelity National Information 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.