Correlation Between Fidus Investment and Park Hotels
Can any of the company-specific risk be diversified away by investing in both Fidus Investment and Park Hotels 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 Park Hotels 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 Park Hotels Resorts, you can compare the effects of market volatilities on Fidus Investment and Park Hotels 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 Park Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidus Investment and Park Hotels.
Diversification Opportunities for Fidus Investment and Park Hotels
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidus and Park is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Fidus Investment Corp and Park Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Park Hotels Resorts 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 Park Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Park Hotels Resorts has no effect on the direction of Fidus Investment i.e., Fidus Investment and Park Hotels go up and down completely randomly.
Pair Corralation between Fidus Investment and Park Hotels
Given the investment horizon of 90 days Fidus Investment Corp is expected to generate 0.42 times more return on investment than Park Hotels. However, Fidus Investment Corp is 2.41 times less risky than Park Hotels. It trades about 0.57 of its potential returns per unit of risk. Park Hotels Resorts is currently generating about 0.22 per unit of risk. If you would invest 1,920 in Fidus Investment Corp on September 4, 2024 and sell it today you would earn a total of 188.00 from holding Fidus Investment Corp or generate 9.79% 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. Park Hotels Resorts
Performance |
| Timeline |
| Fidus Investment Corp |
| Park Hotels Resorts |
Fidus Investment and Park Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidus Investment and Park Hotels
The main advantage of trading using opposite Fidus Investment and Park Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidus Investment position performs unexpectedly, Park Hotels 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 Park Hotels will offset losses from the drop in Park Hotels' long position.| Fidus Investment vs. Golub Capital BDC | Fidus Investment vs. BlackRock TCP Capital | Fidus Investment vs. Carlyle Secured Lending | Fidus Investment vs. Sixth Street Specialty |
| Park Hotels vs. Diamondrock Hospitality | Park Hotels vs. Ryman Hospitality Properties | Park Hotels vs. Pebblebrook Hotel Trust | Park Hotels vs. Sunstone Hotel Investors |
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.
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