Correlation Between Transportadora and Fidus Investment
Can any of the company-specific risk be diversified away by investing in both Transportadora 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 Transportadora and Fidus Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transportadora de Gas and Fidus Investment Corp, you can compare the effects of market volatilities on Transportadora 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 Transportadora with a short position of Fidus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transportadora and Fidus Investment.
Diversification Opportunities for Transportadora and Fidus Investment
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Transportadora and Fidus is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Transportadora de Gas 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 Transportadora 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 Transportadora de Gas 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 Transportadora i.e., Transportadora and Fidus Investment go up and down completely randomly.
Pair Corralation between Transportadora and Fidus Investment
Considering the 90-day investment horizon Transportadora de Gas is expected to generate 3.68 times more return on investment than Fidus Investment. However, Transportadora is 3.68 times more volatile than Fidus Investment Corp. It trades about 0.41 of its potential returns per unit of risk. Fidus Investment Corp is currently generating about 0.43 per unit of risk. If you would invest 2,244 in Transportadora de Gas on August 30, 2024 and sell it today you would earn a total of 675.00 from holding Transportadora de Gas or generate 30.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transportadora de Gas vs. Fidus Investment Corp
Performance |
| Timeline |
| Transportadora de Gas |
| Fidus Investment Corp |
Transportadora and Fidus Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transportadora and Fidus Investment
The main advantage of trading using opposite Transportadora and Fidus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transportadora 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.| Transportadora vs. Petroleo Brasileiro Petrobras | Transportadora vs. Ecopetrol SA ADR | Transportadora vs. Petrleo Brasileiro SA | Transportadora vs. Equinor ASA ADR |
| 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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