Correlation Between Fidus Investment and OFS Credit
Can any of the company-specific risk be diversified away by investing in both Fidus Investment and OFS Credit 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 OFS Credit 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 OFS Credit, you can compare the effects of market volatilities on Fidus Investment and OFS Credit 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 OFS Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidus Investment and OFS Credit.
Diversification Opportunities for Fidus Investment and OFS Credit
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fidus and OFS is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Fidus Investment Corp and OFS Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OFS Credit 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 OFS Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OFS Credit has no effect on the direction of Fidus Investment i.e., Fidus Investment and OFS Credit go up and down completely randomly.
Pair Corralation between Fidus Investment and OFS Credit
Given the investment horizon of 90 days Fidus Investment Corp is expected to generate 1.91 times more return on investment than OFS Credit. However, Fidus Investment is 1.91 times more volatile than OFS Credit. It trades about 0.45 of its potential returns per unit of risk. OFS Credit is currently generating about 0.05 per unit of risk. If you would invest 1,948 in Fidus Investment Corp on August 31, 2024 and sell it today you would earn a total of 160.00 from holding Fidus Investment Corp or generate 8.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidus Investment Corp vs. OFS Credit
Performance |
| Timeline |
| Fidus Investment Corp |
| OFS Credit |
Fidus Investment and OFS Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidus Investment and OFS Credit
The main advantage of trading using opposite Fidus Investment and OFS Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidus Investment position performs unexpectedly, OFS Credit 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 OFS Credit will offset losses from the drop in OFS Credit's long position.| Fidus Investment vs. Horizon Technology Finance | Fidus Investment vs. Stellus Capital Investment | Fidus Investment vs. Prospect Capital | Fidus Investment vs. Ares Capital |
| OFS Credit vs. The Gabelli Equity | OFS Credit vs. The Gabelli Equity | OFS Credit vs. The Gabelli Utility | OFS Credit vs. Bancroft Fund |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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