Correlation Between Deluxe and Fidus Investment
Can any of the company-specific risk be diversified away by investing in both Deluxe 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 Deluxe and Fidus Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deluxe and Fidus Investment Corp, you can compare the effects of market volatilities on Deluxe 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 Deluxe with a short position of Fidus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deluxe and Fidus Investment.
Diversification Opportunities for Deluxe and Fidus Investment
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Deluxe and Fidus is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Deluxe 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 Deluxe 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 Deluxe 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 Deluxe i.e., Deluxe and Fidus Investment go up and down completely randomly.
Pair Corralation between Deluxe and Fidus Investment
Considering the 90-day investment horizon Deluxe is expected to generate 2.55 times more return on investment than Fidus Investment. However, Deluxe is 2.55 times more volatile than Fidus Investment Corp. It trades about 0.05 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 1,556 in Deluxe on September 3, 2024 and sell it today you would earn a total of 761.00 from holding Deluxe or generate 48.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deluxe vs. Fidus Investment Corp
Performance |
| Timeline |
| Deluxe |
| Fidus Investment Corp |
Deluxe and Fidus Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deluxe and Fidus Investment
The main advantage of trading using opposite Deluxe and Fidus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deluxe 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.| Deluxe vs. Criteo Sa | Deluxe vs. Emerald Expositions Events | Deluxe vs. Marchex | Deluxe vs. Integral Ad Science |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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