Correlation Between Great Elm and Fidus Investment
Can any of the company-specific risk be diversified away by investing in both Great Elm 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 Great Elm and Fidus Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Elm Group and Fidus Investment Corp, you can compare the effects of market volatilities on Great Elm 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 Great Elm with a short position of Fidus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Elm and Fidus Investment.
Diversification Opportunities for Great Elm and Fidus Investment
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Great and Fidus is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Great Elm Group 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 Great Elm 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 Great Elm Group 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 Great Elm i.e., Great Elm and Fidus Investment go up and down completely randomly.
Pair Corralation between Great Elm and Fidus Investment
Considering the 90-day investment horizon Great Elm is expected to generate 36.41 times less return on investment than Fidus Investment. In addition to that, Great Elm is 1.89 times more volatile than Fidus Investment Corp. It trades about 0.01 of its total potential returns per unit of risk. Fidus Investment Corp is currently generating about 0.51 per unit of volatility. If you would invest 1,950 in Fidus Investment Corp on September 1, 2024 and sell it today you would earn a total of 179.00 from holding Fidus Investment Corp or generate 9.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great Elm Group vs. Fidus Investment Corp
Performance |
| Timeline |
| Great Elm Group |
| Fidus Investment Corp |
Great Elm and Fidus Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Elm and Fidus Investment
The main advantage of trading using opposite Great Elm and Fidus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Elm 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.| Great Elm vs. Investcorp Credit Management | Great Elm vs. Monroe Capital Corp | Great Elm vs. Allianzgi Convertible Income | Great Elm vs. John Hancock Income |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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