Correlation Between GDS Holdings and Fiserv,

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

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

Diversification Opportunities for GDS Holdings and Fiserv,

0.83

Correlation Coefficient

GDS Holdings  Fiserv,

Very poor diversification

The 3 months correlation between GDS and Fiserv, is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding GDS Holdings and Fiserv, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiserv, and GDS Holdings 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 GDS Holdings are associated (or correlated) with Fiserv,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fiserv, has no effect on the direction of GDS Holdings i.e., GDS Holdings and Fiserv, go up and down completely randomly.

Pair Corralation between GDS Holdings and Fiserv,

Considering the 90-day investment horizon GDS Holdings is expected to generate 2.69 times less return on investment than Fiserv,. In addition to that, GDS Holdings is 3.45 times more volatile than Fiserv,. It trades about 0.04 of its total potential returns per unit of risk. Fiserv, is currently generating about 0.35 per unit of volatility. If you would invest  19,323  in Fiserv, on August 15, 2024 and sell it today you would earn a total of  2,083  from holding Fiserv, or generate 10.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

GDS Holdings  vs.  Fiserv,

GDS Holdings

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GDS Holdings are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady fundamental indicators, GDS Holdings unveiled solid returns over the last few months and may actually be approaching a breakup point.

Fiserv,

Risk-Adjusted Performance

32 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Fiserv, are ranked lower than 32 (%) 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.

Pair Trading with GDS Holdings and Fiserv,

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

The idea behind GDS Holdings and Fiserv, 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.