Correlation Between Fidus Investment and SilverBox Corp

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

Diversification Opportunities for Fidus Investment and SilverBox Corp

0.55

Correlation Coefficient

Fidus Investment  SilverBox Corp

Very weak diversification

The 3 months correlation between Fidus and SilverBox is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Fidus Investment Corp and SilverBox Corp III in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SilverBox Corp III 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 SilverBox Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SilverBox Corp III has no effect on the direction of Fidus Investment i.e., Fidus Investment and SilverBox Corp go up and down completely randomly.

Pair Corralation between Fidus Investment and SilverBox Corp

Given the investment horizon of 90 days Fidus Investment Corp is expected to generate 4.76 times more return on investment than SilverBox Corp. However, Fidus Investment is 4.76 times more volatile than SilverBox Corp III. It trades about 0.28 of its potential returns per unit of risk. SilverBox Corp III is currently generating about 0.38 per unit of risk. If you would invest  1,909  in Fidus Investment Corp on October 26, 2024 and sell it today you would earn a total of  278.00  from holding Fidus Investment Corp or generate 14.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	11.86%
Values	Daily Returns

Fidus Investment Corp  vs.  SilverBox Corp III

Fidus Investment Corp

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidus Investment Corp are ranked lower than 22 (%) 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.

SilverBox Corp III

Risk-Adjusted Performance

0 of 100

Strong

Over the last 90 days SilverBox Corp III has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, SilverBox Corp is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Fidus Investment and SilverBox Corp

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

The idea behind Fidus Investment Corp and SilverBox Corp III 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.