Correlation Between Associated Capital and Fidus Investment
Can any of the company-specific risk be diversified away by investing in both Associated Capital and Fidus Investment 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 Associated Capital and Fidus Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated Capital Group and Fidus Investment Corp, you can compare the effects of market volatilities on Associated Capital and Fidus Investment 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 Associated Capital with a short position of Fidus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and Fidus Investment.
Diversification Opportunities for Associated Capital and Fidus Investment
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Associated and Fidus is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group and Fidus Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidus Investment Corp and Associated Capital 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 Associated Capital Group are associated (or correlated) with Fidus Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidus Investment Corp has no effect on the direction of Associated Capital i.e., Associated Capital and Fidus Investment go up and down completely randomly.
Pair Corralation between Associated Capital and Fidus Investment
Allowing for the 90-day total investment horizon Associated Capital Group is expected to generate 2.44 times more return on investment than Fidus Investment. However, Associated Capital is 2.44 times more volatile than Fidus Investment Corp. It trades about 0.07 of its potential returns per unit of risk. Fidus Investment Corp is currently generating about 0.11 per unit of risk. If you would invest 3,068 in Associated Capital Group on September 3, 2024 and sell it today you would earn a total of 561.00 from holding Associated Capital Group or generate 18.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Associated Capital Group vs. Fidus Investment Corp
Performance |
| Timeline |
| Associated Capital |
| Fidus Investment Corp |
Associated Capital and Fidus Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated Capital and Fidus Investment
The main advantage of trading using opposite Associated Capital and Fidus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital position performs unexpectedly, Fidus Investment 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 Fidus Investment will offset losses from the drop in Fidus Investment's long position.| Associated Capital vs. Abrdn Emerging Markets | Associated Capital vs. DWS Municipal Income | Associated Capital vs. Blackrock Muni Intermediate | Associated Capital vs. Blackrock Muniyield |
| Fidus Investment vs. Federated Premier Municipal | Fidus Investment vs. Blackrock Muniyield | Fidus Investment vs. Federated Investors B | Fidus Investment vs. SEI Investments |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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