Correlation Between Stepstone and Fidus Investment
Can any of the company-specific risk be diversified away by investing in both Stepstone 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 Stepstone and Fidus Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepstone Group and Fidus Investment Corp, you can compare the effects of market volatilities on Stepstone 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 Stepstone with a short position of Fidus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepstone and Fidus Investment.
Diversification Opportunities for Stepstone and Fidus Investment
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Stepstone and Fidus is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Stepstone Group 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 Stepstone 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 Stepstone Group 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 Stepstone i.e., Stepstone and Fidus Investment go up and down completely randomly.
Pair Corralation between Stepstone and Fidus Investment
Given the investment horizon of 90 days Stepstone Group is expected to under-perform the Fidus Investment. In addition to that, Stepstone is 3.38 times more volatile than Fidus Investment Corp. It trades about -0.16 of its total potential returns per unit of risk. Fidus Investment Corp is currently generating about 0.21 per unit of volatility. If you would invest 2,239 in Fidus Investment Corp on November 28, 2024 and sell it today you would earn a total of 65.50 from holding Fidus Investment Corp or generate 2.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Stepstone Group vs. Fidus Investment Corp
Performance |
| Timeline |
| Stepstone Group |
| Fidus Investment Corp |
Stepstone and Fidus Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepstone and Fidus Investment
The main advantage of trading using opposite Stepstone and Fidus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepstone 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.| Stepstone vs. Munivest Fund | Stepstone vs. Blackrock Muniyield Quality | Stepstone vs. Federated Investors B | Stepstone vs. Federated Premier Municipal |
| 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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