Correlation Between KNOT Offshore and Fidus Investment
Can any of the company-specific risk be diversified away by investing in both KNOT Offshore 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 KNOT Offshore and Fidus Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KNOT Offshore Partners and Fidus Investment Corp, you can compare the effects of market volatilities on KNOT Offshore 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 KNOT Offshore with a short position of Fidus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of KNOT Offshore and Fidus Investment.
Diversification Opportunities for KNOT Offshore and Fidus Investment
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KNOT and Fidus is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding KNOT Offshore Partners 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 KNOT Offshore 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 KNOT Offshore Partners 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 KNOT Offshore i.e., KNOT Offshore and Fidus Investment go up and down completely randomly.
Pair Corralation between KNOT Offshore and Fidus Investment
Given the investment horizon of 90 days KNOT Offshore Partners is expected to under-perform the Fidus Investment. In addition to that, KNOT Offshore is 2.13 times more volatile than Fidus Investment Corp. It trades about -0.08 of its total potential returns per unit of risk. Fidus Investment Corp is currently generating about 0.38 per unit of volatility. If you would invest 1,966 in Fidus Investment Corp on August 28, 2024 and sell it today you would earn a total of 140.00 from holding Fidus Investment Corp or generate 7.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KNOT Offshore Partners vs. Fidus Investment Corp
Performance |
| Timeline |
| KNOT Offshore Partners |
| Fidus Investment Corp |
KNOT Offshore and Fidus Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KNOT Offshore and Fidus Investment
The main advantage of trading using opposite KNOT Offshore and Fidus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KNOT Offshore 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.| KNOT Offshore vs. USA Compression Partners | KNOT Offshore vs. Dynagas LNG Partners | KNOT Offshore vs. Crossamerica Partners LP | KNOT Offshore vs. Delek Logistics Partners |
| Fidus Investment vs. Aurora Innovation | Fidus Investment vs. HUMANA INC | Fidus Investment vs. Aquagold International | Fidus Investment vs. Barloworld Ltd ADR |
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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