Correlation Between Fidus Investment and Davis Commodities
Can any of the company-specific risk be diversified away by investing in both Fidus Investment and Davis Commodities 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 Davis Commodities 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 Davis Commodities Limited, you can compare the effects of market volatilities on Fidus Investment and Davis Commodities 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 Davis Commodities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidus Investment and Davis Commodities.
Diversification Opportunities for Fidus Investment and Davis Commodities
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fidus and Davis is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Fidus Investment Corp and Davis Commodities Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Davis Commodities 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 Davis Commodities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Davis Commodities has no effect on the direction of Fidus Investment i.e., Fidus Investment and Davis Commodities go up and down completely randomly.
Pair Corralation between Fidus Investment and Davis Commodities
Given the investment horizon of 90 days Fidus Investment Corp is expected to generate 0.31 times more return on investment than Davis Commodities. However, Fidus Investment Corp is 3.28 times less risky than Davis Commodities. It trades about 0.34 of its potential returns per unit of risk. Davis Commodities Limited is currently generating about -0.15 per unit of risk. If you would invest 2,131 in Fidus Investment Corp on November 3, 2024 and sell it today you would earn a total of 130.00 from holding Fidus Investment Corp or generate 6.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidus Investment Corp vs. Davis Commodities Limited
Performance |
| Timeline |
| Fidus Investment Corp |
| Davis Commodities |
Fidus Investment and Davis Commodities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidus Investment and Davis Commodities
The main advantage of trading using opposite Fidus Investment and Davis Commodities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidus Investment position performs unexpectedly, Davis Commodities 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 Davis Commodities will offset losses from the drop in Davis Commodities' 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 |
| Davis Commodities vs. ASE Industrial Holding | Davis Commodities vs. BE Semiconductor Industries | Davis Commodities vs. Skyworks Solutions | Davis Commodities vs. Qorvo Inc |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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