Correlation Between Fidus Investment and Country Garden

Can any of the company-specific risk be diversified away by investing in both Fidus Investment and Country Garden 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 Country Garden 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 Country Garden Holdings, you can compare the effects of market volatilities on Fidus Investment and Country Garden 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 Country Garden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidus Investment and Country Garden.

Diversification Opportunities for Fidus Investment and Country Garden

0.0

Correlation Coefficient

Fidus Investment  Country Garden

Pay attention - limited upside

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

Pair Corralation between Fidus Investment and Country Garden

If you would invest  2,048  in Fidus Investment Corp on December 20, 2024 and sell it today you would earn a total of  65.00  from holding Fidus Investment Corp or generate 3.17% 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.  Country Garden Holdings

Fidus Investment Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fidus Investment Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Fidus Investment is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Country Garden Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Country Garden Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Country Garden is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Fidus Investment and Country Garden

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

The idea behind Fidus Investment Corp and Country Garden Holdings 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.