Correlation Between JD Sports and Fidus Investment
Can any of the company-specific risk be diversified away by investing in both JD Sports 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 JD Sports and Fidus Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JD Sports Fashion and Fidus Investment Corp, you can compare the effects of market volatilities on JD Sports 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 JD Sports with a short position of Fidus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and Fidus Investment.
Diversification Opportunities for JD Sports and Fidus Investment
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JDDSF and Fidus is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion 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 JD Sports 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 JD Sports Fashion 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 JD Sports i.e., JD Sports and Fidus Investment go up and down completely randomly.
Pair Corralation between JD Sports and Fidus Investment
Assuming the 90 days horizon JD Sports Fashion is expected to under-perform the Fidus Investment. In addition to that, JD Sports is 3.7 times more volatile than Fidus Investment Corp. It trades about 0.0 of its total potential returns per unit of risk. Fidus Investment Corp is currently generating about 0.1 per unit of volatility. If you would invest 1,751 in Fidus Investment Corp on September 4, 2024 and sell it today you would earn a total of 357.00 from holding Fidus Investment Corp or generate 20.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
JD Sports Fashion vs. Fidus Investment Corp
Performance |
| Timeline |
| JD Sports Fashion |
| Fidus Investment Corp |
JD Sports and Fidus Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and Fidus Investment
The main advantage of trading using opposite JD Sports and Fidus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports 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.The idea behind JD Sports Fashion and Fidus Investment Corp 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.| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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