Correlation Between Fidus Investment and Hafnia
Can any of the company-specific risk be diversified away by investing in both Fidus Investment and Hafnia 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 Hafnia 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 Hafnia Limited, you can compare the effects of market volatilities on Fidus Investment and Hafnia 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 Hafnia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidus Investment and Hafnia.
Diversification Opportunities for Fidus Investment and Hafnia
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fidus and Hafnia is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Fidus Investment Corp and Hafnia Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hafnia Limited 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 Hafnia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hafnia Limited has no effect on the direction of Fidus Investment i.e., Fidus Investment and Hafnia go up and down completely randomly.
Pair Corralation between Fidus Investment and Hafnia
Given the investment horizon of 90 days Fidus Investment Corp is expected to generate 0.34 times more return on investment than Hafnia. However, Fidus Investment Corp is 2.94 times less risky than Hafnia. It trades about 0.11 of its potential returns per unit of risk. Hafnia Limited is currently generating about -0.07 per unit of risk. If you would invest 1,894 in Fidus Investment Corp on September 3, 2024 and sell it today you would earn a total of 235.00 from holding Fidus Investment Corp or generate 12.41% 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. Hafnia Limited
Performance |
| Timeline |
| Fidus Investment Corp |
| Hafnia Limited |
Fidus Investment and Hafnia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidus Investment and Hafnia
The main advantage of trading using opposite Fidus Investment and Hafnia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidus Investment position performs unexpectedly, Hafnia 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 Hafnia will offset losses from the drop in Hafnia'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 |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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