Correlation Between Fidus Investment and CapitaLand Investment
Can any of the company-specific risk be diversified away by investing in both Fidus Investment and CapitaLand 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 Fidus Investment and CapitaLand Investment 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 CapitaLand Investment Limited, you can compare the effects of market volatilities on Fidus Investment and CapitaLand 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 Fidus Investment with a short position of CapitaLand Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidus Investment and CapitaLand Investment.
Diversification Opportunities for Fidus Investment and CapitaLand Investment
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fidus and CapitaLand is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Fidus Investment Corp and CapitaLand Investment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CapitaLand Investment 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 CapitaLand Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CapitaLand Investment has no effect on the direction of Fidus Investment i.e., Fidus Investment and CapitaLand Investment go up and down completely randomly.
Pair Corralation between Fidus Investment and CapitaLand Investment
Given the investment horizon of 90 days Fidus Investment Corp is expected to generate 0.2 times more return on investment than CapitaLand Investment. However, Fidus Investment Corp is 4.95 times less risky than CapitaLand Investment. It trades about 0.08 of its potential returns per unit of risk. CapitaLand Investment Limited is currently generating about 0.01 per unit of risk. If you would invest 1,512 in Fidus Investment Corp on September 3, 2024 and sell it today you would earn a total of 617.00 from holding Fidus Investment Corp or generate 40.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidus Investment Corp vs. CapitaLand Investment Limited
Performance |
| Timeline |
| Fidus Investment Corp |
| CapitaLand Investment |
Fidus Investment and CapitaLand Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidus Investment and CapitaLand Investment
The main advantage of trading using opposite Fidus Investment and CapitaLand Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidus Investment position performs unexpectedly, CapitaLand 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 CapitaLand Investment will offset losses from the drop in CapitaLand Investment'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 |
| CapitaLand Investment vs. IRSA Inversiones Y | CapitaLand Investment vs. Anywhere Real Estate | CapitaLand Investment vs. Newmark Group | CapitaLand Investment vs. Wharf Real Estate |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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