Correlation Between Fidus Investment and MFS Charter
Can any of the company-specific risk be diversified away by investing in both Fidus Investment and MFS Charter 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 MFS Charter 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 MFS Charter Income, you can compare the effects of market volatilities on Fidus Investment and MFS Charter 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 MFS Charter. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidus Investment and MFS Charter.
Diversification Opportunities for Fidus Investment and MFS Charter
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fidus and MFS is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Fidus Investment Corp and MFS Charter Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Charter Income 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 MFS Charter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS Charter Income has no effect on the direction of Fidus Investment i.e., Fidus Investment and MFS Charter go up and down completely randomly.
Pair Corralation between Fidus Investment and MFS Charter
Given the investment horizon of 90 days Fidus Investment Corp is expected to generate 1.79 times more return on investment than MFS Charter. However, Fidus Investment is 1.79 times more volatile than MFS Charter Income. It trades about 0.39 of its potential returns per unit of risk. MFS Charter Income is currently generating about -0.01 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 140.00 from holding Fidus Investment Corp or generate 7.12% 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. MFS Charter Income
Performance |
| Timeline |
| Fidus Investment Corp |
| MFS Charter Income |
Fidus Investment and MFS Charter Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidus Investment and MFS Charter
The main advantage of trading using opposite Fidus Investment and MFS Charter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidus Investment position performs unexpectedly, MFS Charter 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 MFS Charter will offset losses from the drop in MFS Charter's long position.| Fidus Investment vs. PowerUp Acquisition Corp | Fidus Investment vs. Aurora Innovation | Fidus Investment vs. HUMANA INC | Fidus Investment vs. Aquagold International |
| MFS Charter vs. MFS High Income | MFS Charter vs. MFS Investment Grade | MFS Charter vs. Eaton Vance National | MFS Charter vs. Invesco High Income |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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