Correlation Between Fidus Investment and Lincoln Electric
Can any of the company-specific risk be diversified away by investing in both Fidus Investment and Lincoln Electric 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 Lincoln Electric 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 Lincoln Electric Holdings, you can compare the effects of market volatilities on Fidus Investment and Lincoln Electric 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 Lincoln Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidus Investment and Lincoln Electric.
Diversification Opportunities for Fidus Investment and Lincoln Electric
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidus and Lincoln is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Fidus Investment Corp and Lincoln Electric Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lincoln Electric Holdings 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 Lincoln Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lincoln Electric Holdings has no effect on the direction of Fidus Investment i.e., Fidus Investment and Lincoln Electric go up and down completely randomly.
Pair Corralation between Fidus Investment and Lincoln Electric
Given the investment horizon of 90 days Fidus Investment is expected to generate 1.49 times less return on investment than Lincoln Electric. But when comparing it to its historical volatility, Fidus Investment Corp is 2.95 times less risky than Lincoln Electric. It trades about 0.51 of its potential returns per unit of risk. Lincoln Electric Holdings is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 19,256 in Lincoln Electric Holdings on September 1, 2024 and sell it today you would earn a total of 2,592 from holding Lincoln Electric Holdings or generate 13.46% 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. Lincoln Electric Holdings
Performance |
| Timeline |
| Fidus Investment Corp |
| Lincoln Electric Holdings |
Fidus Investment and Lincoln Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidus Investment and Lincoln Electric
The main advantage of trading using opposite Fidus Investment and Lincoln Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidus Investment position performs unexpectedly, Lincoln Electric 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 Lincoln Electric will offset losses from the drop in Lincoln Electric'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 |
| Lincoln Electric vs. Hillman Solutions Corp | Lincoln Electric vs. AB SKF | Lincoln Electric vs. Kennametal |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |