Correlation Between Fidus Investment and CBH

Can any of the company-specific risk be diversified away by investing in both Fidus Investment and CBH 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 Fidus Investment and CBH into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fidus Investment Corp and CBH, you can compare the effects of market volatilities on Fidus Investment and CBH 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 Fidus Investment with a short position of CBH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidus Investment and CBH.

Diversification Opportunities for Fidus Investment and CBH

0.0

Correlation Coefficient

Fidus Investment  CBH

Pay attention - limited upside

The 3 months correlation between Fidus and CBH is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fidus Investment Corp and CBH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBH and Fidus 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 Fidus Investment Corp are associated (or correlated) with CBH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBH has no effect on the direction of Fidus Investment i.e., Fidus Investment and CBH go up and down completely randomly.

Pair Corralation between Fidus Investment and CBH

If you would invest  2,047  in Fidus Investment Corp on December 1, 2024 and sell it today you would earn a total of  282.00  from holding Fidus Investment Corp or generate 13.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Fidus Investment Corp  vs.  CBH

Fidus Investment Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidus Investment Corp are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Fidus Investment unveiled solid returns over the last few months and may actually be approaching a breakup point.

CBH

Risk-Adjusted Performance

Very Weak

Over the last 90 days CBH has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, CBH is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Fidus Investment and CBH

The main advantage of trading using opposite Fidus Investment and CBH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidus Investment position performs unexpectedly, CBH 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 CBH will offset losses from the drop in CBH's long position.

The idea behind Fidus Investment Corp and CBH pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.