Correlation Between Cornerstone Strategic and Fidus Investment
Can any of the company-specific risk be diversified away by investing in both Cornerstone Strategic 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 Cornerstone Strategic and Fidus Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cornerstone Strategic Value and Fidus Investment Corp, you can compare the effects of market volatilities on Cornerstone Strategic 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 Cornerstone Strategic with a short position of Fidus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cornerstone Strategic and Fidus Investment.
Diversification Opportunities for Cornerstone Strategic and Fidus Investment
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cornerstone and Fidus is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Cornerstone Strategic Value 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 Cornerstone Strategic 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 Cornerstone Strategic Value 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 Cornerstone Strategic i.e., Cornerstone Strategic and Fidus Investment go up and down completely randomly.
Pair Corralation between Cornerstone Strategic and Fidus Investment
Considering the 90-day investment horizon Cornerstone Strategic is expected to generate 1.04 times less return on investment than Fidus Investment. But when comparing it to its historical volatility, Cornerstone Strategic Value is 1.23 times less risky than Fidus Investment. It trades about 0.37 of its potential returns per unit of risk. Fidus Investment Corp is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 2,131 in Fidus Investment Corp on November 2, 2024 and sell it today you would earn a total of 112.00 from holding Fidus Investment Corp or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cornerstone Strategic Value vs. Fidus Investment Corp
Performance |
| Timeline |
| Cornerstone Strategic |
| Fidus Investment Corp |
Cornerstone Strategic and Fidus Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cornerstone Strategic and Fidus Investment
The main advantage of trading using opposite Cornerstone Strategic and Fidus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cornerstone Strategic 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.The idea behind Cornerstone Strategic Value and Fidus Investment Corp 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.
| Fidus Investment vs. Golub Capital BDC | Fidus Investment vs. BlackRock TCP Capital | Fidus Investment vs. Carlyle Secured Lending | Fidus Investment vs. Sixth Street Specialty |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Stocks Directory Find actively traded stocks across global markets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |