Correlation Between Fidus Investment and Fidelis Insurance

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

Diversification Opportunities for Fidus Investment and Fidelis Insurance

-0.33

Correlation Coefficient

Fidus Investment  Fidelis Insurance

Very good diversification

The 3 months correlation between Fidus and Fidelis is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Fidus Investment Corp and Fidelis Insurance Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelis Insurance 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 Fidelis Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelis Insurance has no effect on the direction of Fidus Investment i.e., Fidus Investment and Fidelis Insurance go up and down completely randomly.

Pair Corralation between Fidus Investment and Fidelis Insurance

Given the investment horizon of 90 days Fidus Investment Corp is expected to generate 0.43 times more return on investment than Fidelis Insurance. However, Fidus Investment Corp is 2.32 times less risky than Fidelis Insurance. It trades about 0.03 of its potential returns per unit of risk. Fidelis Insurance Holdings is currently generating about -0.06 per unit of risk. If you would invest  2,038  in Fidus Investment Corp on December 28, 2024 and sell it today you would earn a total of  32.00  from holding Fidus Investment Corp or generate 1.57% return on investment over 90 days.

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

Fidus Investment Corp  vs.  Fidelis Insurance Holdings

Fidus Investment Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fidus Investment Corp are ranked lower than 2 (%) 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.

Fidelis Insurance

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fidelis Insurance Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Fidus Investment and Fidelis Insurance

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

The idea behind Fidus Investment Corp and Fidelis Insurance 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.