Correlation Between NYSE Composite and Fidus Investment
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Fidus Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Fidus Investment Corp, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Fidus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Fidus Investment.
Diversification Opportunities for NYSE Composite and Fidus Investment
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Fidus is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Fidus Investment go up and down completely randomly.
Pair Corralation between NYSE Composite and Fidus Investment
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.89 times more return on investment than Fidus Investment. However, NYSE Composite is 1.12 times less risky than Fidus Investment. It trades about 0.14 of its potential returns per unit of risk. Fidus Investment Corp is currently generating about 0.11 per unit of risk. If you would invest 1,800,696 in NYSE Composite on August 30, 2024 and sell it today you would earn a total of 220,286 from holding NYSE Composite or generate 12.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Fidus Investment Corp
Performance |
| Timeline |
NYSE Composite and Fidus Investment Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Fidus Investment Corp
Pair trading matchups for Fidus Investment
Pair Trading with NYSE Composite and Fidus Investment
The main advantage of trading using opposite NYSE Composite and Fidus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Delek Drilling | NYSE Composite vs. Helmerich and Payne | NYSE Composite vs. Waste Management | NYSE Composite vs. US Global Investors |
| 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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