Correlation Between Fidus Investment and Aurora Technology
Can any of the company-specific risk be diversified away by investing in both Fidus Investment and Aurora Technology 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 Fidus Investment and Aurora Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidus Investment Corp and Aurora Technology Acquisition, you can compare the effects of market volatilities on Fidus Investment and Aurora Technology 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 Fidus Investment with a short position of Aurora Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidus Investment and Aurora Technology.
Diversification Opportunities for Fidus Investment and Aurora Technology
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidus and Aurora is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Fidus Investment Corp and Aurora Technology Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Technology and Fidus Investment 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 Fidus Investment Corp are associated (or correlated) with Aurora Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora Technology has no effect on the direction of Fidus Investment i.e., Fidus Investment and Aurora Technology go up and down completely randomly.
Pair Corralation between Fidus Investment and Aurora Technology
Given the investment horizon of 90 days Fidus Investment Corp is expected to generate 6.53 times more return on investment than Aurora Technology. However, Fidus Investment is 6.53 times more volatile than Aurora Technology Acquisition. It trades about 0.09 of its potential returns per unit of risk. Aurora Technology Acquisition is currently generating about 0.19 per unit of risk. If you would invest 1,638 in Fidus Investment Corp on September 2, 2024 and sell it today you would earn a total of 491.00 from holding Fidus Investment Corp or generate 29.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 7.8% |
| Values | Daily Returns |
Fidus Investment Corp vs. Aurora Technology Acquisition
Performance |
| Timeline |
| Fidus Investment Corp |
| Aurora Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Fidus Investment and Aurora Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidus Investment and Aurora Technology
The main advantage of trading using opposite Fidus Investment and Aurora Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidus Investment position performs unexpectedly, Aurora Technology 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 Aurora Technology will offset losses from the drop in Aurora Technology's long position.| Fidus Investment vs. Visa Class A | Fidus Investment vs. Diamond Hill Investment | Fidus Investment vs. Distoken Acquisition | Fidus Investment vs. Associated Capital Group |
| Aurora Technology vs. Chipotle Mexican Grill | Aurora Technology vs. RCI Hospitality Holdings | Aurora Technology vs. Dennys Corp | Aurora Technology vs. Shake Shack |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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