Correlation Between Fidus Investment and Western Acquisition
Can any of the company-specific risk be diversified away by investing in both Fidus Investment and Western Acquisition 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 Western Acquisition 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 Western Acquisition Ventures, you can compare the effects of market volatilities on Fidus Investment and Western Acquisition 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 Western Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidus Investment and Western Acquisition.
Diversification Opportunities for Fidus Investment and Western Acquisition
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fidus and Western is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Fidus Investment Corp and Western Acquisition Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Acquisition 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 Western Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Acquisition has no effect on the direction of Fidus Investment i.e., Fidus Investment and Western Acquisition go up and down completely randomly.
Pair Corralation between Fidus Investment and Western Acquisition
Given the investment horizon of 90 days Fidus Investment Corp is expected to generate 0.35 times more return on investment than Western Acquisition. However, Fidus Investment Corp is 2.86 times less risky than Western Acquisition. It trades about 0.57 of its potential returns per unit of risk. Western Acquisition Ventures is currently generating about -0.06 per unit of risk. If you would invest 2,029 in Fidus Investment Corp on September 12, 2024 and sell it today you would earn a total of 120.00 from holding Fidus Investment Corp or generate 5.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidus Investment Corp vs. Western Acquisition Ventures
Performance |
| Timeline |
| Fidus Investment Corp |
| Western Acquisition |
Fidus Investment and Western Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidus Investment and Western Acquisition
The main advantage of trading using opposite Fidus Investment and Western Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidus Investment position performs unexpectedly, Western Acquisition 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 Western Acquisition will offset losses from the drop in Western Acquisition's long position.| Fidus Investment vs. Gladstone Investment | Fidus Investment vs. Horizon Technology Finance | Fidus Investment vs. Stellus Capital Investment | Fidus Investment vs. Prospect Capital |
| Western Acquisition vs. HUMANA INC | Western Acquisition vs. Barloworld Ltd ADR | Western Acquisition vs. Morningstar Unconstrained Allocation | Western Acquisition vs. Thrivent High Yield |
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 Stocks Directory module to find actively traded stocks across global markets.
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