Correlation Between Fidelity National and GDS Holdings
Can any of the company-specific risk be diversified away by investing in both Fidelity National and GDS Holdings 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 GDS Holdings 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 GDS Holdings, you can compare the effects of market volatilities on Fidelity National and GDS Holdings 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 GDS Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity National and GDS Holdings.
Diversification Opportunities for Fidelity National and GDS Holdings
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fidelity and GDS is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Information and GDS Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GDS Holdings 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 GDS Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GDS Holdings has no effect on the direction of Fidelity National i.e., Fidelity National and GDS Holdings go up and down completely randomly.
Pair Corralation between Fidelity National and GDS Holdings
Considering the 90-day investment horizon Fidelity National is expected to generate 25.33 times less return on investment than GDS Holdings. But when comparing it to its historical volatility, Fidelity National Information is 3.38 times less risky than GDS Holdings. It trades about 0.01 of its potential returns per unit of risk. GDS Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,779 in GDS Holdings on May 5, 2025 and sell it today you would earn a total of 633.00 from holding GDS Holdings or generate 22.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Fidelity National Information vs. GDS Holdings
Performance |
Timeline |
Fidelity National |
GDS Holdings |
Fidelity National and GDS Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fidelity National and GDS Holdings
The main advantage of trading using opposite Fidelity National and GDS Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity National position performs unexpectedly, GDS Holdings 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 GDS Holdings will offset losses from the drop in GDS Holdings' long position.Fidelity National vs. Fiserv, | Fidelity National vs. Jack Henry Associates | Fidelity National vs. Cognizant Technology Solutions | Fidelity National vs. CDW Corp |
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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 the Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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