Correlation Between Fidus Investment and Cornerstone Strategic

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

Diversification Opportunities for Fidus Investment and Cornerstone Strategic

0.77

Correlation Coefficient

Fidus Investment  Cornerstone Strategic

Poor diversification

The 3 months correlation between Fidus and Cornerstone is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Fidus Investment Corp and Cornerstone Strategic Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cornerstone Strategic 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 Cornerstone Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cornerstone Strategic has no effect on the direction of Fidus Investment i.e., Fidus Investment and Cornerstone Strategic go up and down completely randomly.

Pair Corralation between Fidus Investment and Cornerstone Strategic

Given the investment horizon of 90 days Fidus Investment Corp is expected to under-perform the Cornerstone Strategic. In addition to that, Fidus Investment is 1.07 times more volatile than Cornerstone Strategic Value. It trades about -0.02 of its total potential returns per unit of risk. Cornerstone Strategic Value is currently generating about 0.04 per unit of volatility. If you would invest  760.00  in Cornerstone Strategic Value on March 26, 2025 and sell it today you would earn a total of  30.00  from holding Cornerstone Strategic Value or generate 3.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Fidus Investment Corp  vs.  Cornerstone Strategic Value

Fidus Investment Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fidus Investment Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Fidus Investment is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Cornerstone Strategic

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cornerstone Strategic Value are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy essential indicators, Cornerstone Strategic is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Fidus Investment and Cornerstone Strategic

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

The idea behind Fidus Investment Corp and Cornerstone Strategic Value 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.