Correlation Between Fidus Investment and Hamilton Insurance

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

Diversification Opportunities for Fidus Investment and Hamilton Insurance

-0.29

Correlation Coefficient

Fidus Investment  Hamilton Insurance

Very good diversification

The 3 months correlation between Fidus and Hamilton is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Fidus Investment Corp and Hamilton Insurance Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Insurance Group, 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 Hamilton Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Insurance Group, has no effect on the direction of Fidus Investment i.e., Fidus Investment and Hamilton Insurance go up and down completely randomly.

Pair Corralation between Fidus Investment and Hamilton Insurance

Given the investment horizon of 90 days Fidus Investment is expected to generate 6.87 times less return on investment than Hamilton Insurance. But when comparing it to its historical volatility, Fidus Investment Corp is 1.83 times less risky than Hamilton Insurance. It trades about 0.03 of its potential returns per unit of risk. Hamilton Insurance Group, is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,890  in Hamilton Insurance Group, on December 28, 2024 and sell it today you would earn a total of  234.00  from holding Hamilton Insurance Group, or generate 12.38% 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.  Hamilton Insurance Group,

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.

Hamilton Insurance Group,

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hamilton Insurance Group, are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent technical and fundamental indicators, Hamilton Insurance reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fidus Investment and Hamilton Insurance

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

The idea behind Fidus Investment Corp and Hamilton Insurance Group, 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.