Correlation Between Fidus Investment and Silvercrest Asset
Can any of the company-specific risk be diversified away by investing in both Fidus Investment and Silvercrest Asset 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 Silvercrest Asset 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 Silvercrest Asset Management, you can compare the effects of market volatilities on Fidus Investment and Silvercrest Asset 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 Silvercrest Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidus Investment and Silvercrest Asset.
Diversification Opportunities for Fidus Investment and Silvercrest Asset
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidus and Silvercrest is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Fidus Investment Corp and Silvercrest Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silvercrest Asset 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 Silvercrest Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silvercrest Asset has no effect on the direction of Fidus Investment i.e., Fidus Investment and Silvercrest Asset go up and down completely randomly.
Pair Corralation between Fidus Investment and Silvercrest Asset
Given the investment horizon of 90 days Fidus Investment is expected to generate 1.13 times less return on investment than Silvercrest Asset. But when comparing it to its historical volatility, Fidus Investment Corp is 2.94 times less risky than Silvercrest Asset. It trades about 0.07 of its potential returns per unit of risk. Silvercrest Asset Management is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,810 in Silvercrest Asset Management on September 19, 2024 and sell it today you would earn a total of 12.00 from holding Silvercrest Asset Management or generate 0.66% 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. Silvercrest Asset Management
Performance |
| Timeline |
| Fidus Investment Corp |
| Silvercrest Asset |
Fidus Investment and Silvercrest Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidus Investment and Silvercrest Asset
The main advantage of trading using opposite Fidus Investment and Silvercrest Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidus Investment position performs unexpectedly, Silvercrest Asset 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 Silvercrest Asset will offset losses from the drop in Silvercrest Asset's long position.| Fidus Investment vs. Visa Class A | Fidus Investment vs. Deutsche Bank AG | Fidus Investment vs. Dynex Capital |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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