Correlation Between Fidus Investment and NESNVX

Can any of the company-specific risk be diversified away by investing in both Fidus Investment and NESNVX 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 NESNVX 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 NESNVX 2625 14 SEP 51, you can compare the effects of market volatilities on Fidus Investment and NESNVX 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 NESNVX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidus Investment and NESNVX.

Diversification Opportunities for Fidus Investment and NESNVX

0.27

Correlation Coefficient

Fidus Investment  NESNVX

Modest diversification

The 3 months correlation between Fidus and NESNVX is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Fidus Investment Corp and NESNVX 2625 14 SEP 51 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NESNVX 2625 14 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 NESNVX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NESNVX 2625 14 has no effect on the direction of Fidus Investment i.e., Fidus Investment and NESNVX go up and down completely randomly.

Pair Corralation between Fidus Investment and NESNVX

Given the investment horizon of 90 days Fidus Investment Corp is expected to generate 0.47 times more return on investment than NESNVX. However, Fidus Investment Corp is 2.11 times less risky than NESNVX. It trades about 0.14 of its potential returns per unit of risk. NESNVX 2625 14 SEP 51 is currently generating about -0.19 per unit of risk. If you would invest  1,898  in Fidus Investment Corp on September 21, 2024 and sell it today you would earn a total of  130.00  from holding Fidus Investment Corp or generate 6.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	38.1%
Values	Daily Returns

Fidus Investment Corp  vs.  NESNVX 2625 14 SEP 51

Fidus Investment Corp

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fidus Investment Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Fidus Investment may actually be approaching a critical reversion point that can send shares even higher in January 2025.

NESNVX 2625 14

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NESNVX 2625 14 SEP 51 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for NESNVX 2625 14 SEP 51 investors.

Pair Trading with Fidus Investment and NESNVX

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

The idea behind Fidus Investment Corp and NESNVX 2625 14 SEP 51 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.