Correlation Between Fidus Investment and Carlyle Secured
Can any of the company-specific risk be diversified away by investing in both Fidus Investment and Carlyle Secured 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 Carlyle Secured 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 Carlyle Secured Lending, you can compare the effects of market volatilities on Fidus Investment and Carlyle Secured 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 Carlyle Secured. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidus Investment and Carlyle Secured.
Diversification Opportunities for Fidus Investment and Carlyle Secured
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidus and Carlyle is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Fidus Investment Corp and Carlyle Secured Lending in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle Secured Lending 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 Carlyle Secured. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlyle Secured Lending has no effect on the direction of Fidus Investment i.e., Fidus Investment and Carlyle Secured go up and down completely randomly.
Pair Corralation between Fidus Investment and Carlyle Secured
Given the investment horizon of 90 days Fidus Investment is expected to generate 2.64 times less return on investment than Carlyle Secured. But when comparing it to its historical volatility, Fidus Investment Corp is 1.22 times less risky than Carlyle Secured. It trades about 0.13 of its potential returns per unit of risk. Carlyle Secured Lending is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,630 in Carlyle Secured Lending on February 5, 2024 and sell it today you would earn a total of 88.00 from holding Carlyle Secured Lending or generate 5.4% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Fidus Investment Corp vs. Carlyle Secured Lending
Performance |
Timeline |
Fidus Investment Corp |
Carlyle Secured Lending |
Fidus Investment and Carlyle Secured Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fidus Investment and Carlyle Secured
The main advantage of trading using opposite Fidus Investment and Carlyle Secured positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidus Investment position performs unexpectedly, Carlyle Secured 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 Carlyle Secured will offset losses from the drop in Carlyle Secured's long position.Fidus Investment vs. Golub Capital BDC | Fidus Investment vs. BlackRock TCP Capital | Fidus Investment vs. Carlyle Secured Lending | Fidus Investment vs. Sixth Street Specialty |
Carlyle Secured vs. Sixth Street Specialty | Carlyle Secured vs. Golub Capital BDC | Carlyle Secured vs. Fidus Investment Corp | Carlyle Secured vs. New Mountain Finance |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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