Correlation Between Gladstone Investment and Fidus Investment
Can any of the company-specific risk be diversified away by investing in both Gladstone Investment and Fidus Investment 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 Gladstone Investment and Fidus Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Investment and Fidus Investment Corp, you can compare the effects of market volatilities on Gladstone Investment and Fidus Investment 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 Gladstone Investment with a short position of Fidus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Investment and Fidus Investment.
Diversification Opportunities for Gladstone Investment and Fidus Investment
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gladstone and Fidus is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and Fidus Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidus Investment Corp and Gladstone 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 Gladstone Investment are associated (or correlated) with Fidus Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidus Investment Corp has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and Fidus Investment go up and down completely randomly.
Pair Corralation between Gladstone Investment and Fidus Investment
Assuming the 90 days horizon Gladstone Investment is expected to generate 6.44 times less return on investment than Fidus Investment. But when comparing it to its historical volatility, Gladstone Investment is 3.59 times less risky than Fidus Investment. It trades about 0.25 of its potential returns per unit of risk. Fidus Investment Corp is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 2,107 in Fidus Investment Corp on November 5, 2024 and sell it today you would earn a total of 154.00 from holding Fidus Investment Corp or generate 7.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Investment vs. Fidus Investment Corp
Performance |
| Timeline |
| Gladstone Investment |
| Fidus Investment Corp |
Gladstone Investment and Fidus Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Investment and Fidus Investment
The main advantage of trading using opposite Gladstone Investment and Fidus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Investment position performs unexpectedly, Fidus Investment 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 Fidus Investment will offset losses from the drop in Fidus Investment's long position.| Gladstone Investment vs. Newtek Business Services | Gladstone Investment vs. Oxford Lane Capital | Gladstone Investment vs. Gladstone Investment | Gladstone Investment vs. Gladstone Commercial Corp |
| Fidus Investment vs. Golub Capital BDC | Fidus Investment vs. BlackRock TCP Capital | Fidus Investment vs. Carlyle Secured Lending | Fidus Investment vs. Sixth Street Specialty |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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