Correlation Between AMCOR PLC and Fidelity Info

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Can any of the company-specific risk be diversified away by investing in both AMCOR PLC and Fidelity Info 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 AMCOR PLC and Fidelity Info into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMCOR PLC CDI and Fidelity Info Tech, you can compare the effects of market volatilities on AMCOR PLC and Fidelity Info 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 AMCOR PLC with a short position of Fidelity Info. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMCOR PLC and Fidelity Info.

Diversification Opportunities for AMCOR PLC and Fidelity Info

0.6
  Correlation Coefficient

Poor diversification

The 3 months correlation between AMCOR and Fidelity is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding AMCOR PLC CDI 11 and Fidelity Info Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Info Tech and AMCOR PLC 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 AMCOR PLC CDI are associated (or correlated) with Fidelity Info. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Info Tech has no effect on the direction of AMCOR PLC i.e., AMCOR PLC and Fidelity Info go up and down completely randomly.

Pair Corralation between AMCOR PLC and Fidelity Info

Assuming the 90 days trading horizon AMCOR PLC CDI is expected to generate 0.77 times more return on investment than Fidelity Info. However, AMCOR PLC CDI is 1.3 times less risky than Fidelity Info. It trades about 0.05 of its potential returns per unit of risk. Fidelity Info Tech is currently generating about 0.01 per unit of risk. If you would invest  1,442  in AMCOR PLC CDI on September 1, 2022 and sell it today you would earn a total of  362.00  from holding AMCOR PLC CDI or generate 25.1% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy81.25%
ValuesDaily Returns

AMCOR PLC CDI 11  vs.  Fidelity Info Tech

 Performance (%) 
       Timeline  
AMCOR PLC CDI 
AMCOR Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in AMCOR PLC CDI are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, AMCOR PLC is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

AMCOR Price Channel

Fidelity Info Tech 
Fidelity Performance
0 of 100
Over the last 90 days Fidelity Info Tech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Fidelity Info is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Fidelity Price Channel

AMCOR PLC and Fidelity Info Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with AMCOR PLC and Fidelity Info

The main advantage of trading using opposite AMCOR PLC and Fidelity Info positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMCOR PLC position performs unexpectedly, Fidelity Info 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 Info will offset losses from the drop in Fidelity Info's long position.
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The idea behind AMCOR PLC CDI and Fidelity Info Tech 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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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.

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