Correlation Between Fidus Investment and Trio Petroleum
Can any of the company-specific risk be diversified away by investing in both Fidus Investment and Trio Petroleum 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 Trio Petroleum 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 Trio Petroleum Corp, you can compare the effects of market volatilities on Fidus Investment and Trio Petroleum 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 Trio Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidus Investment and Trio Petroleum.
Diversification Opportunities for Fidus Investment and Trio Petroleum
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fidus and Trio is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Fidus Investment Corp and Trio Petroleum Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trio Petroleum 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 Trio Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trio Petroleum Corp has no effect on the direction of Fidus Investment i.e., Fidus Investment and Trio Petroleum go up and down completely randomly.
Pair Corralation between Fidus Investment and Trio Petroleum
Given the investment horizon of 90 days Fidus Investment is expected to generate 7.44 times less return on investment than Trio Petroleum. But when comparing it to its historical volatility, Fidus Investment Corp is 17.54 times less risky than Trio Petroleum. It trades about 0.2 of its potential returns per unit of risk. Trio Petroleum Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 107.00 in Trio Petroleum Corp on December 5, 2024 and sell it today you would earn a total of 16.00 from holding Trio Petroleum Corp or generate 14.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Fidus Investment Corp vs. Trio Petroleum Corp
Performance |
Timeline |
Fidus Investment Corp |
Trio Petroleum Corp |
Fidus Investment and Trio Petroleum Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fidus Investment and Trio Petroleum
The main advantage of trading using opposite Fidus Investment and Trio Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidus Investment position performs unexpectedly, Trio Petroleum 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 Trio Petroleum will offset losses from the drop in Trio Petroleum's long position.Fidus Investment vs. Golub Capital BDC | Fidus Investment vs. BlackRock TCP Capital | Fidus Investment vs. Carlyle Secured Lending | Fidus Investment vs. Sixth Street Specialty |
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Check out your portfolio center.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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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