Correlation Between Fidus Investment and Playstudios

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

Diversification Opportunities for Fidus Investment and Playstudios

0.79
  Correlation Coefficient

Poor diversification

The 3 months correlation between Fidus and Playstudios is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Fidus Investment Corp and Playstudios in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playstudios 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 Playstudios. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playstudios has no effect on the direction of Fidus Investment i.e., Fidus Investment and Playstudios go up and down completely randomly.

Pair Corralation between Fidus Investment and Playstudios

Given the investment horizon of 90 days Fidus Investment is expected to generate 2.03 times less return on investment than Playstudios. But when comparing it to its historical volatility, Fidus Investment Corp is 4.54 times less risky than Playstudios. It trades about 0.24 of its potential returns per unit of risk. Playstudios is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  143.00  in Playstudios on October 21, 2024 and sell it today you would earn a total of  34.00  from holding Playstudios or generate 23.78% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Fidus Investment Corp  vs.  Playstudios

 Performance 
       Timeline  
Fidus Investment Corp 

Risk-Adjusted Performance

19 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Fidus Investment Corp are ranked lower than 19 (%) 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.
Playstudios 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Playstudios are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Playstudios unveiled solid returns over the last few months and may actually be approaching a breakup point.

Fidus Investment and Playstudios Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Fidus Investment and Playstudios

The main advantage of trading using opposite Fidus Investment and Playstudios positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidus Investment position performs unexpectedly, Playstudios 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 Playstudios will offset losses from the drop in Playstudios' long position.
The idea behind Fidus Investment Corp and Playstudios 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.

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