Correlation Between Fidus Investment and Great Elm
Can any of the company-specific risk be diversified away by investing in both Fidus Investment and Great Elm 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 Great Elm 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 Great Elm Group, you can compare the effects of market volatilities on Fidus Investment and Great Elm 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 Great Elm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidus Investment and Great Elm.
Diversification Opportunities for Fidus Investment and Great Elm
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fidus and Great is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Fidus Investment Corp and Great Elm Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Elm Group 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 Great Elm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Elm Group has no effect on the direction of Fidus Investment i.e., Fidus Investment and Great Elm go up and down completely randomly.
Pair Corralation between Fidus Investment and Great Elm
Given the investment horizon of 90 days Fidus Investment Corp is expected to generate 0.53 times more return on investment than Great Elm. However, Fidus Investment Corp is 1.89 times less risky than Great Elm. It trades about 0.51 of its potential returns per unit of risk. Great Elm Group is currently generating about 0.01 per unit of risk. If you would invest 1,950 in Fidus Investment Corp on September 1, 2024 and sell it today you would earn a total of 179.00 from holding Fidus Investment Corp or generate 9.18% 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. Great Elm Group
Performance |
| Timeline |
| Fidus Investment Corp |
| Great Elm Group |
Fidus Investment and Great Elm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidus Investment and Great Elm
The main advantage of trading using opposite Fidus Investment and Great Elm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidus Investment position performs unexpectedly, Great Elm 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 Great Elm will offset losses from the drop in Great Elm'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 |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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