Correlation Between Fidus Investment and Freedom Holding
Can any of the company-specific risk be diversified away by investing in both Fidus Investment and Freedom Holding 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 Freedom Holding 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 Freedom Holding Corp, you can compare the effects of market volatilities on Fidus Investment and Freedom Holding 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 Freedom Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidus Investment and Freedom Holding.
Diversification Opportunities for Fidus Investment and Freedom Holding
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidus and Freedom is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Fidus Investment Corp and Freedom Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freedom Holding Corp 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 Freedom Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freedom Holding Corp has no effect on the direction of Fidus Investment i.e., Fidus Investment and Freedom Holding go up and down completely randomly.
Pair Corralation between Fidus Investment and Freedom Holding
Given the investment horizon of 90 days Fidus Investment is expected to generate 1.25 times less return on investment than Freedom Holding. But when comparing it to its historical volatility, Fidus Investment Corp is 2.28 times less risky than Freedom Holding. It trades about 0.53 of its potential returns per unit of risk. Freedom Holding Corp is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 10,646 in Freedom Holding Corp on September 2, 2024 and sell it today you would earn a total of 1,242 from holding Freedom Holding Corp or generate 11.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidus Investment Corp vs. Freedom Holding Corp
Performance |
| Timeline |
| Fidus Investment Corp |
| Freedom Holding Corp |
Fidus Investment and Freedom Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidus Investment and Freedom Holding
The main advantage of trading using opposite Fidus Investment and Freedom Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidus Investment position performs unexpectedly, Freedom Holding 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 Freedom Holding will offset losses from the drop in Freedom Holding'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 |
| Freedom Holding vs. Nomura Holdings ADR | Freedom Holding vs. Scully Royalty | Freedom Holding vs. Oppenheimer Holdings | Freedom Holding vs. Houlihan Lokey |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |