Correlation Between Corporacion America and Fidus Investment
Can any of the company-specific risk be diversified away by investing in both Corporacion America 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 Corporacion America and Fidus Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corporacion America Airports and Fidus Investment Corp, you can compare the effects of market volatilities on Corporacion America 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 Corporacion America with a short position of Fidus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporacion America and Fidus Investment.
Diversification Opportunities for Corporacion America and Fidus Investment
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Corporacion and Fidus is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Corporacion America Airports 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 Corporacion America 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 Corporacion America Airports 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 Corporacion America i.e., Corporacion America and Fidus Investment go up and down completely randomly.
Pair Corralation between Corporacion America and Fidus Investment
Given the investment horizon of 90 days Corporacion America Airports is expected to generate 2.52 times more return on investment than Fidus Investment. However, Corporacion America is 2.52 times more volatile than Fidus Investment Corp. It trades about 0.08 of its potential returns per unit of risk. Fidus Investment Corp is currently generating about 0.08 per unit of risk. If you would invest 829.00 in Corporacion America Airports on September 3, 2024 and sell it today you would earn a total of 1,014 from holding Corporacion America Airports or generate 122.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Corporacion America Airports vs. Fidus Investment Corp
Performance |
| Timeline |
| Corporacion America |
| Fidus Investment Corp |
Corporacion America and Fidus Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corporacion America and Fidus Investment
The main advantage of trading using opposite Corporacion America and Fidus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporacion America 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.| Corporacion America vs. Blade Air Mobility | Corporacion America vs. Clear Secure | Corporacion America vs. Archer Aviation | Corporacion America vs. Beauty Health Co |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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