Correlation Between Fidus Investment and PepsiCo
Can any of the company-specific risk be diversified away by investing in both Fidus Investment and PepsiCo 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 PepsiCo 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 PepsiCo, you can compare the effects of market volatilities on Fidus Investment and PepsiCo 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 PepsiCo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidus Investment and PepsiCo.
Diversification Opportunities for Fidus Investment and PepsiCo
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fidus and PepsiCo is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Fidus Investment Corp and PepsiCo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PepsiCo 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 PepsiCo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PepsiCo has no effect on the direction of Fidus Investment i.e., Fidus Investment and PepsiCo go up and down completely randomly.
Pair Corralation between Fidus Investment and PepsiCo
Given the investment horizon of 90 days Fidus Investment Corp is expected to generate 0.71 times more return on investment than PepsiCo. However, Fidus Investment Corp is 1.41 times less risky than PepsiCo. It trades about 0.51 of its potential returns per unit of risk. PepsiCo is currently generating about -0.06 per unit of risk. If you would invest 1,950 in Fidus Investment Corp on September 1, 2024 and sell it today you would earn a total of 179.00 from holding Fidus Investment Corp or generate 9.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidus Investment Corp vs. PepsiCo
Performance |
| Timeline |
| Fidus Investment Corp |
| PepsiCo |
Fidus Investment and PepsiCo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidus Investment and PepsiCo
The main advantage of trading using opposite Fidus Investment and PepsiCo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidus Investment position performs unexpectedly, PepsiCo 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 PepsiCo will offset losses from the drop in PepsiCo'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 |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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