Correlation Between Fidus Investment and Atmos Energy

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

Diversification Opportunities for Fidus Investment and Atmos Energy

0.6

Correlation Coefficient

Fidus Investment  Atmos Energy

Poor diversification

The 3 months correlation between Fidus and Atmos is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Fidus Investment Corp and Atmos Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atmos Energy 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 Atmos Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atmos Energy has no effect on the direction of Fidus Investment i.e., Fidus Investment and Atmos Energy go up and down completely randomly.

Pair Corralation between Fidus Investment and Atmos Energy

Given the investment horizon of 90 days Fidus Investment Corp is expected to generate 0.73 times more return on investment than Atmos Energy. However, Fidus Investment Corp is 1.38 times less risky than Atmos Energy. It trades about 0.15 of its potential returns per unit of risk. Atmos Energy is currently generating about 0.01 per unit of risk. If you would invest  1,896  in Fidus Investment Corp on September 20, 2024 and sell it today you would earn a total of  130.00  from holding Fidus Investment Corp or generate 6.86% 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.  Atmos Energy

Fidus Investment Corp

Risk-Adjusted Performance

12 of 100

OK

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.

Atmos Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atmos Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Atmos Energy is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Fidus Investment and Atmos Energy

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

The idea behind Fidus Investment Corp and Atmos Energy 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.

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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.