Correlation Between SLR Investment and Fidus Investment
Can any of the company-specific risk be diversified away by investing in both SLR Investment 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 SLR Investment and Fidus Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SLR Investment Corp and Fidus Investment Corp, you can compare the effects of market volatilities on SLR Investment 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 SLR Investment with a short position of Fidus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and Fidus Investment.
Diversification Opportunities for SLR Investment and Fidus Investment
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SLR and Fidus is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp 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 SLR Investment 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 SLR Investment Corp 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 SLR Investment i.e., SLR Investment and Fidus Investment go up and down completely randomly.
Pair Corralation between SLR Investment and Fidus Investment
Given the investment horizon of 90 days SLR Investment Corp is expected to generate 1.23 times more return on investment than Fidus Investment. However, SLR Investment is 1.23 times more volatile than Fidus Investment Corp. It trades about 0.26 of its potential returns per unit of risk. Fidus Investment Corp is currently generating about 0.3 per unit of risk. If you would invest 1,548 in SLR Investment Corp on August 25, 2024 and sell it today you would earn a total of 101.00 from holding SLR Investment Corp or generate 6.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SLR Investment Corp vs. Fidus Investment Corp
Performance |
| Timeline |
| SLR Investment Corp |
| Fidus Investment Corp |
SLR Investment and Fidus Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLR Investment and Fidus Investment
The main advantage of trading using opposite SLR Investment and Fidus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment 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.| SLR Investment vs. Horizon Technology Finance | SLR Investment vs. WhiteHorse Finance | SLR Investment vs. Gladstone Capital | SLR Investment vs. PennantPark Floating Rate |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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