Correlation Between Air Transport and Fidus Investment
Can any of the company-specific risk be diversified away by investing in both Air Transport 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 Air Transport and Fidus Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Transport Services and Fidus Investment Corp, you can compare the effects of market volatilities on Air Transport 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 Air Transport with a short position of Fidus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Transport and Fidus Investment.
Diversification Opportunities for Air Transport and Fidus Investment
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Air and Fidus is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Air Transport Services 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 Air Transport 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 Air Transport Services 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 Air Transport i.e., Air Transport and Fidus Investment go up and down completely randomly.
Pair Corralation between Air Transport and Fidus Investment
Given the investment horizon of 90 days Air Transport is expected to generate 9.67 times less return on investment than Fidus Investment. In addition to that, Air Transport is 3.52 times more volatile than Fidus Investment Corp. It trades about 0.0 of its total potential returns per unit of risk. Fidus Investment Corp is currently generating about 0.08 per unit of volatility. If you would invest 1,512 in Fidus Investment Corp on September 3, 2024 and sell it today you would earn a total of 617.00 from holding Fidus Investment Corp or generate 40.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Transport Services vs. Fidus Investment Corp
Performance |
| Timeline |
| Air Transport Services |
| Fidus Investment Corp |
Air Transport and Fidus Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Transport and Fidus Investment
The main advantage of trading using opposite Air Transport and Fidus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Transport 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.| Air Transport vs. Copa Holdings SA | Air Transport vs. SkyWest | Air Transport vs. Sun Country Airlines | Air Transport vs. Frontier Group Holdings |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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