Correlation Between Fidus Investment and Evergreen Corp

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

Diversification Opportunities for Fidus Investment and Evergreen Corp

0.74

Correlation Coefficient

Fidus Investment  Evergreen Corp

Poor diversification

The 3 months correlation between Fidus and Evergreen is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Fidus Investment Corp and Evergreen Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evergreen Corp 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 Evergreen Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evergreen Corp has no effect on the direction of Fidus Investment i.e., Fidus Investment and Evergreen Corp go up and down completely randomly.

Pair Corralation between Fidus Investment and Evergreen Corp

Given the investment horizon of 90 days Fidus Investment Corp is expected to generate 5.26 times more return on investment than Evergreen Corp. However, Fidus Investment is 5.26 times more volatile than Evergreen Corp. It trades about 0.07 of its potential returns per unit of risk. Evergreen Corp is currently generating about 0.16 per unit of risk. If you would invest  1,551  in Fidus Investment Corp on October 4, 2024 and sell it today you would earn a total of  574.00  from holding Fidus Investment Corp or generate 37.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Fidus Investment Corp  vs.  Evergreen Corp

Fidus Investment Corp

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidus Investment Corp are ranked lower than 20 (%) 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.

Evergreen Corp

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Evergreen Corp are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, Evergreen Corp is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Fidus Investment and Evergreen Corp

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

The idea behind Fidus Investment Corp and Evergreen Corp 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.