Correlation Between Gatos Silver and Fidus Investment

Can any of the company-specific risk be diversified away by investing in both Gatos Silver and Fidus Investment 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 Gatos Silver and Fidus Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gatos Silver and Fidus Investment Corp, you can compare the effects of market volatilities on Gatos Silver and Fidus Investment 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 Gatos Silver with a short position of Fidus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gatos Silver and Fidus Investment.

Diversification Opportunities for Gatos Silver and Fidus Investment

-0.81

Correlation Coefficient

Gatos Silver  Fidus Investment

Pay attention - limited upside

The 3 months correlation between Gatos and Fidus is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Gatos Silver and Fidus Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidus Investment Corp and Gatos Silver 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 Gatos Silver are associated (or correlated) with Fidus Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidus Investment Corp has no effect on the direction of Gatos Silver i.e., Gatos Silver and Fidus Investment go up and down completely randomly.

Pair Corralation between Gatos Silver and Fidus Investment

Given the investment horizon of 90 days Gatos Silver is expected to generate 1.18 times less return on investment than Fidus Investment. In addition to that, Gatos Silver is 4.49 times more volatile than Fidus Investment Corp. It trades about 0.08 of its total potential returns per unit of risk. Fidus Investment Corp is currently generating about 0.41 per unit of volatility. If you would invest  2,057  in Fidus Investment Corp on October 24, 2024 and sell it today you would earn a total of  113.00  from holding Fidus Investment Corp or generate 5.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	88.89%
Values	Daily Returns

Gatos Silver  vs.  Fidus Investment Corp

Gatos Silver

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gatos Silver has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Fidus Investment Corp

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidus Investment Corp are ranked lower than 19 (%) 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.

Pair Trading with Gatos Silver and Fidus Investment

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

The idea behind Gatos Silver and Fidus Investment Corp 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.