Correlation Between Fidus Investment and Chemtrade Logistics
Can any of the company-specific risk be diversified away by investing in both Fidus Investment and Chemtrade Logistics 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 Chemtrade Logistics 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 Chemtrade Logistics Income, you can compare the effects of market volatilities on Fidus Investment and Chemtrade Logistics 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 Chemtrade Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidus Investment and Chemtrade Logistics.
Diversification Opportunities for Fidus Investment and Chemtrade Logistics
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fidus and Chemtrade is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Fidus Investment Corp and Chemtrade Logistics Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemtrade Logistics 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 Chemtrade Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chemtrade Logistics has no effect on the direction of Fidus Investment i.e., Fidus Investment and Chemtrade Logistics go up and down completely randomly.
Pair Corralation between Fidus Investment and Chemtrade Logistics
Given the investment horizon of 90 days Fidus Investment Corp is expected to generate 0.43 times more return on investment than Chemtrade Logistics. However, Fidus Investment Corp is 2.31 times less risky than Chemtrade Logistics. It trades about 0.4 of its potential returns per unit of risk. Chemtrade Logistics Income is currently generating about -0.15 per unit of risk. If you would invest 2,119 in Fidus Investment Corp on November 4, 2024 and sell it today you would earn a total of 142.00 from holding Fidus Investment Corp or generate 6.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidus Investment Corp vs. Chemtrade Logistics Income
Performance |
| Timeline |
| Fidus Investment Corp |
| Chemtrade Logistics |
Fidus Investment and Chemtrade Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidus Investment and Chemtrade Logistics
The main advantage of trading using opposite Fidus Investment and Chemtrade Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidus Investment position performs unexpectedly, Chemtrade Logistics 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 Chemtrade Logistics will offset losses from the drop in Chemtrade Logistics' long position.| Fidus Investment vs. Golub Capital BDC | Fidus Investment vs. BlackRock TCP Capital | Fidus Investment vs. Carlyle Secured Lending | Fidus Investment vs. Sixth Street Specialty |
| Chemtrade Logistics vs. PepsiCo | Chemtrade Logistics vs. Turning Point Brands | Chemtrade Logistics vs. The Coca Cola | Chemtrade Logistics vs. El Pollo Loco |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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