Correlation Between Fidus Investment and PS International

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Can any of the company-specific risk be diversified away by investing in both Fidus Investment and PS International 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 PS International 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 PS International Group, you can compare the effects of market volatilities on Fidus Investment and PS International 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 PS International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidus Investment and PS International.

Diversification Opportunities for Fidus Investment and PS International

-0.79
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Fidus and PSIG is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Fidus Investment Corp and PS International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PS International 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 PS International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PS International has no effect on the direction of Fidus Investment i.e., Fidus Investment and PS International go up and down completely randomly.

Pair Corralation between Fidus Investment and PS International

Given the investment horizon of 90 days Fidus Investment Corp is expected to generate 0.05 times more return on investment than PS International. However, Fidus Investment Corp is 21.64 times less risky than PS International. It trades about 0.1 of its potential returns per unit of risk. PS International Group is currently generating about -0.04 per unit of risk. If you would invest  1,800  in Fidus Investment Corp on September 14, 2024 and sell it today you would earn a total of  341.00  from holding Fidus Investment Corp or generate 18.94% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy41.37%
ValuesDaily Returns

Fidus Investment Corp  vs.  PS International Group

 Performance 
       Timeline  
Fidus Investment Corp 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Fidus Investment Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Fidus Investment may actually be approaching a critical reversion point that can send shares even higher in January 2025.
PS International 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days PS International Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Fidus Investment and PS International Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Fidus Investment and PS International

The main advantage of trading using opposite Fidus Investment and PS International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidus Investment position performs unexpectedly, PS International 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 PS International will offset losses from the drop in PS International's long position.
The idea behind Fidus Investment Corp and PS International Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

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