Correlation Between Fidus Investment and Hercules Capital
Can any of the company-specific risk be diversified away by investing in both Fidus Investment and Hercules Capital 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 Hercules Capital 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 Hercules Capital, you can compare the effects of market volatilities on Fidus Investment and Hercules Capital 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 Hercules Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidus Investment and Hercules Capital.
Diversification Opportunities for Fidus Investment and Hercules Capital
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fidus and Hercules is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fidus Investment Corp and Hercules Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hercules Capital 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 Hercules Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hercules Capital has no effect on the direction of Fidus Investment i.e., Fidus Investment and Hercules Capital go up and down completely randomly.
Pair Corralation between Fidus Investment and Hercules Capital
Given the investment horizon of 90 days Fidus Investment Corp is expected to generate 0.67 times more return on investment than Hercules Capital. However, Fidus Investment Corp is 1.5 times less risky than Hercules Capital. It trades about 0.36 of its potential returns per unit of risk. Hercules Capital is currently generating about -0.15 per unit of risk. If you would invest 1,966 in Fidus Investment Corp on August 27, 2024 and sell it today you would earn a total of 131.00 from holding Fidus Investment Corp or generate 6.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidus Investment Corp vs. Hercules Capital
Performance |
| Timeline |
| Fidus Investment Corp |
| Hercules Capital |
Fidus Investment and Hercules Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidus Investment and Hercules Capital
The main advantage of trading using opposite Fidus Investment and Hercules Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidus Investment position performs unexpectedly, Hercules Capital 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 Hercules Capital will offset losses from the drop in Hercules Capital's long position.| Fidus Investment vs. PowerUp Acquisition Corp | Fidus Investment vs. Aurora Innovation | Fidus Investment vs. HUMANA INC | Fidus Investment vs. Aquagold International |
| Hercules Capital vs. Main Street Capital | Hercules Capital vs. PennantPark Floating Rate | Hercules Capital vs. FS KKR Capital | Hercules Capital vs. Prospect Capital |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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