Correlation Between Arbor Metals and Fairfax Financial
Can any of the company-specific risk be diversified away by investing in both Arbor Metals and Fairfax Financial 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 Arbor Metals and Fairfax Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arbor Metals Corp and Fairfax Financial Holdings, you can compare the effects of market volatilities on Arbor Metals and Fairfax Financial 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 Arbor Metals with a short position of Fairfax Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arbor Metals and Fairfax Financial.
Diversification Opportunities for Arbor Metals and Fairfax Financial
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Arbor and Fairfax is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Arbor Metals Corp and Fairfax Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fairfax Financial and Arbor Metals 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 Arbor Metals Corp are associated (or correlated) with Fairfax Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fairfax Financial has no effect on the direction of Arbor Metals i.e., Arbor Metals and Fairfax Financial go up and down completely randomly.
Pair Corralation between Arbor Metals and Fairfax Financial
Assuming the 90 days horizon Arbor Metals Corp is expected to under-perform the Fairfax Financial. In addition to that, Arbor Metals is 6.22 times more volatile than Fairfax Financial Holdings. It trades about -0.09 of its total potential returns per unit of risk. Fairfax Financial Holdings is currently generating about 0.07 per unit of volatility. If you would invest 2,358 in Fairfax Financial Holdings on September 3, 2024 and sell it today you would earn a total of 142.00 from holding Fairfax Financial Holdings or generate 6.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arbor Metals Corp vs. Fairfax Financial Holdings
Performance |
| Timeline |
| Arbor Metals Corp |
| Fairfax Financial |
Arbor Metals and Fairfax Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arbor Metals and Fairfax Financial
The main advantage of trading using opposite Arbor Metals and Fairfax Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arbor Metals position performs unexpectedly, Fairfax Financial 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 Fairfax Financial will offset losses from the drop in Fairfax Financial's long position.| Arbor Metals vs. Kiplin Metals | Arbor Metals vs. Pure Energy Minerals | Arbor Metals vs. Noram Lithium Corp | Arbor Metals vs. Minnova Corp |
| Fairfax Financial vs. Canadian Utilities Limited | Fairfax Financial vs. Arbor Metals Corp | Fairfax Financial vs. Partners Value Investments | Fairfax Financial vs. Economic Investment Trust |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |