Correlation Between Inflection Point and Fidus Investment

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Can any of the company-specific risk be diversified away by investing in both Inflection Point 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 Inflection Point and Fidus Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inflection Point Acquisition and Fidus Investment Corp, you can compare the effects of market volatilities on Inflection Point 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 Inflection Point with a short position of Fidus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inflection Point and Fidus Investment.

Diversification Opportunities for Inflection Point and Fidus Investment

0.57
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Inflection and Fidus is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Inflection Point Acquisition 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 Inflection Point 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 Inflection Point Acquisition 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 Inflection Point i.e., Inflection Point and Fidus Investment go up and down completely randomly.

Pair Corralation between Inflection Point and Fidus Investment

Assuming the 90 days horizon Inflection Point Acquisition is expected to generate 9.43 times more return on investment than Fidus Investment. However, Inflection Point is 9.43 times more volatile than Fidus Investment Corp. It trades about 0.19 of its potential returns per unit of risk. Fidus Investment Corp is currently generating about 0.03 per unit of risk. If you would invest  1,086  in Inflection Point Acquisition on September 20, 2024 and sell it today you would earn a total of  249.00  from holding Inflection Point Acquisition or generate 22.93% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Inflection Point Acquisition  vs.  Fidus Investment Corp

 Performance 
       Timeline  
Inflection Point Acq 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Inflection Point Acquisition are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Inflection Point unveiled solid returns over the last few months and may actually be approaching a breakup point.
Fidus Investment Corp 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Fidus Investment Corp are ranked lower than 12 (%) 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 January 2025.

Inflection Point and Fidus Investment Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Inflection Point and Fidus Investment

The main advantage of trading using opposite Inflection Point and Fidus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inflection Point 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 Inflection Point Acquisition 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.

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