Correlation Between Fidus Investment and Corporacion America
Can any of the company-specific risk be diversified away by investing in both Fidus Investment and Corporacion America 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 Corporacion America 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 Corporacion America Airports, you can compare the effects of market volatilities on Fidus Investment and Corporacion America 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 Corporacion America. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidus Investment and Corporacion America.
Diversification Opportunities for Fidus Investment and Corporacion America
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fidus and Corporacion is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Fidus Investment Corp and Corporacion America Airports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporacion America 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 Corporacion America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporacion America has no effect on the direction of Fidus Investment i.e., Fidus Investment and Corporacion America go up and down completely randomly.
Pair Corralation between Fidus Investment and Corporacion America
Given the investment horizon of 90 days Fidus Investment is expected to generate 2.64 times less return on investment than Corporacion America. But when comparing it to its historical volatility, Fidus Investment Corp is 2.52 times less risky than Corporacion America. It trades about 0.08 of its potential returns per unit of risk. Corporacion America Airports is currently generating about 0.08 of returns per unit of risk over similar time horizon. 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 |
Fidus Investment Corp vs. Corporacion America Airports
Performance |
| Timeline |
| Fidus Investment Corp |
| Corporacion America |
Fidus Investment and Corporacion America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidus Investment and Corporacion America
The main advantage of trading using opposite Fidus Investment and Corporacion America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidus Investment position performs unexpectedly, Corporacion America 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 Corporacion America will offset losses from the drop in Corporacion America's long position.| Fidus Investment vs. Federated Premier Municipal | Fidus Investment vs. Blackrock Muniyield | Fidus Investment vs. Federated Investors B | Fidus Investment vs. SEI Investments |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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