Correlation Between Fidus Investment and New Providence
Can any of the company-specific risk be diversified away by investing in both Fidus Investment and New Providence 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 New Providence 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 New Providence Acquisition, you can compare the effects of market volatilities on Fidus Investment and New Providence 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 New Providence. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidus Investment and New Providence.
Diversification Opportunities for Fidus Investment and New Providence
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fidus and New is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Fidus Investment Corp and New Providence Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Providence Acqui 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 New Providence. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Providence Acqui has no effect on the direction of Fidus Investment i.e., Fidus Investment and New Providence go up and down completely randomly.
Pair Corralation between Fidus Investment and New Providence
Given the investment horizon of 90 days Fidus Investment Corp is expected to generate 0.41 times more return on investment than New Providence. However, Fidus Investment Corp is 2.46 times less risky than New Providence. It trades about 0.08 of its potential returns per unit of risk. New Providence Acquisition is currently generating about 0.03 per unit of risk. If you would invest 1,503 in Fidus Investment Corp on September 13, 2024 and sell it today you would earn a total of 638.00 from holding Fidus Investment Corp or generate 42.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.76% |
| Values | Daily Returns |
Fidus Investment Corp vs. New Providence Acquisition
Performance |
| Timeline |
| Fidus Investment Corp |
| New Providence Acqui |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Fidus Investment and New Providence Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidus Investment and New Providence
The main advantage of trading using opposite Fidus Investment and New Providence positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidus Investment position performs unexpectedly, New Providence 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 New Providence will offset losses from the drop in New Providence's long position.| Fidus Investment vs. Visa Class A | Fidus Investment vs. Diamond Hill Investment | Fidus Investment vs. Distoken Acquisition | Fidus Investment vs. AllianceBernstein Holding LP |
| New Providence vs. Amgen Inc | New Providence vs. Cardinal Health | New Providence vs. Microbot Medical | New Providence vs. Tandem Diabetes Care |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |