Correlation Between Boston Beer and Fidus Investment
Can any of the company-specific risk be diversified away by investing in both Boston Beer 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 Boston Beer and Fidus Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Beer and Fidus Investment Corp, you can compare the effects of market volatilities on Boston Beer 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 Boston Beer with a short position of Fidus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and Fidus Investment.
Diversification Opportunities for Boston Beer and Fidus Investment
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Boston and Fidus is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Boston Beer 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 Boston Beer 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 Boston Beer 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 Boston Beer i.e., Boston Beer and Fidus Investment go up and down completely randomly.
Pair Corralation between Boston Beer and Fidus Investment
Considering the 90-day investment horizon Boston Beer is expected to generate 4.57 times less return on investment than Fidus Investment. In addition to that, Boston Beer is 2.92 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 0.1 per unit of volatility. If you would invest 1,614 in Fidus Investment Corp on September 1, 2024 and sell it today you would earn a total of 515.00 from holding Fidus Investment Corp or generate 31.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Beer vs. Fidus Investment Corp
Performance |
| Timeline |
| Boston Beer |
| Fidus Investment Corp |
Boston Beer and Fidus Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Beer and Fidus Investment
The main advantage of trading using opposite Boston Beer and Fidus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer 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.| Boston Beer vs. Anheuser Busch Inbev | Boston Beer vs. Molson Coors Beverage | Boston Beer vs. Heineken NV | Boston Beer vs. Ambev SA ADR |
| Fidus Investment vs. Visa Class A | Fidus Investment vs. Diamond Hill Investment | Fidus Investment vs. Distoken Acquisition | Fidus Investment vs. Associated Capital Group |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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