Correlation Between Fidus Investment and EXPRESS

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

Diversification Opportunities for Fidus Investment and EXPRESS

0.4

Correlation Coefficient

Fidus Investment  EXPRESS

Very weak diversification

The 3 months correlation between Fidus and EXPRESS is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Fidus Investment Corp and EXPRESS SCRIPTS HLDG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EXPRESS SCRIPTS HLDG 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 EXPRESS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EXPRESS SCRIPTS HLDG has no effect on the direction of Fidus Investment i.e., Fidus Investment and EXPRESS go up and down completely randomly.

Pair Corralation between Fidus Investment and EXPRESS

Given the investment horizon of 90 days Fidus Investment Corp is expected to generate 1.13 times more return on investment than EXPRESS. However, Fidus Investment is 1.13 times more volatile than EXPRESS SCRIPTS HLDG. It trades about 0.05 of its potential returns per unit of risk. EXPRESS SCRIPTS HLDG is currently generating about -0.05 per unit of risk. If you would invest  2,004  in Fidus Investment Corp on December 23, 2024 and sell it today you would earn a total of  48.00  from holding Fidus Investment Corp or generate 2.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	88.52%
Values	Daily Returns

Fidus Investment Corp  vs.  EXPRESS SCRIPTS HLDG

Fidus Investment Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fidus Investment Corp are ranked lower than 3 (%) 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.

EXPRESS SCRIPTS HLDG

Risk-Adjusted Performance

Very Weak

Over the last 90 days EXPRESS SCRIPTS HLDG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, EXPRESS is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fidus Investment and EXPRESS

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

The idea behind Fidus Investment Corp and EXPRESS SCRIPTS HLDG 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.