Correlation Between Fidus Investment and ReposiTrak

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

Diversification Opportunities for Fidus Investment and ReposiTrak

0.86

Correlation Coefficient

Fidus Investment  ReposiTrak

Very poor diversification

The 3 months correlation between Fidus and ReposiTrak is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Fidus Investment Corp and ReposiTrak in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ReposiTrak 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 ReposiTrak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ReposiTrak has no effect on the direction of Fidus Investment i.e., Fidus Investment and ReposiTrak go up and down completely randomly.

Pair Corralation between Fidus Investment and ReposiTrak

Given the investment horizon of 90 days Fidus Investment Corp is expected to generate 0.33 times more return on investment than ReposiTrak. However, Fidus Investment Corp is 3.08 times less risky than ReposiTrak. It trades about 0.05 of its potential returns per unit of risk. ReposiTrak is currently generating about -0.2 per unit of risk. If you would invest  2,087  in Fidus Investment Corp on October 11, 2024 and sell it today you would earn a total of  17.00  from holding Fidus Investment Corp or generate 0.81% return on investment over 90 days.

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

Fidus Investment Corp  vs.  ReposiTrak

Fidus Investment Corp

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidus Investment Corp are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Fidus Investment may actually be approaching a critical reversion point that can send shares even higher in February 2025.

ReposiTrak

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ReposiTrak are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, ReposiTrak may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Fidus Investment and ReposiTrak

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

The idea behind Fidus Investment Corp and ReposiTrak 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.