Correlation Between Fidus Investment and Canon
Can any of the company-specific risk be diversified away by investing in both Fidus Investment and Canon 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 Canon 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 Canon Inc ADR, you can compare the effects of market volatilities on Fidus Investment and Canon 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 Canon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidus Investment and Canon.
Diversification Opportunities for Fidus Investment and Canon
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fidus and Canon is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Fidus Investment Corp and Canon Inc ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canon Inc ADR 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 Canon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canon Inc ADR has no effect on the direction of Fidus Investment i.e., Fidus Investment and Canon go up and down completely randomly.
Pair Corralation between Fidus Investment and Canon
Given the investment horizon of 90 days Fidus Investment Corp is expected to generate 5.09 times more return on investment than Canon. However, Fidus Investment is 5.09 times more volatile than Canon Inc ADR. It trades about 0.05 of its potential returns per unit of risk. Canon Inc ADR is currently generating about -0.02 per unit of risk. If you would invest 1,408 in Fidus Investment Corp on March 19, 2024 and sell it today you would earn a total of 583.00 from holding Fidus Investment Corp or generate 41.41% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 43.74% |
Values | Daily Returns |
Fidus Investment Corp vs. Canon Inc ADR
Performance |
Timeline |
Fidus Investment Corp |
Canon Inc ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Fidus Investment and Canon Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fidus Investment and Canon
The main advantage of trading using opposite Fidus Investment and Canon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidus Investment position performs unexpectedly, Canon 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 Canon will offset losses from the drop in Canon's long position.Fidus Investment vs. Federated Premier Municipal | Fidus Investment vs. Blackrock Muniyield | Fidus Investment vs. NXG NextGen Infrastructure | Fidus Investment vs. AssetMark Financial Holdings |
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Check out your portfolio center.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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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