Correlation Between Advent Wireless and Fairfax Financial
Can any of the company-specific risk be diversified away by investing in both Advent Wireless 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 Advent Wireless and Fairfax Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advent Wireless and Fairfax Financial Holdings, you can compare the effects of market volatilities on Advent Wireless 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 Advent Wireless with a short position of Fairfax Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Wireless and Fairfax Financial.
Diversification Opportunities for Advent Wireless and Fairfax Financial
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Advent and Fairfax is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Advent Wireless and Fairfax Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fairfax Financial and Advent Wireless 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 Advent Wireless 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 Advent Wireless i.e., Advent Wireless and Fairfax Financial go up and down completely randomly.
Pair Corralation between Advent Wireless and Fairfax Financial
If you would invest 2,493 in Fairfax Financial Holdings on November 4, 2024 and sell it today you would earn a total of 13.00 from holding Fairfax Financial Holdings or generate 0.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Advent Wireless vs. Fairfax Financial Holdings
Performance |
| Timeline |
| Advent Wireless |
| Fairfax Financial |
Advent Wireless and Fairfax Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advent Wireless and Fairfax Financial
The main advantage of trading using opposite Advent Wireless and Fairfax Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Wireless 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.| Advent Wireless vs. Telus Corp | Advent Wireless vs. Toronto Dominion Bank | Advent Wireless vs. Manulife Financial Corp | Advent Wireless vs. Enbridge |
| Fairfax Financial vs. Goodfood Market Corp | Fairfax Financial vs. Solid Impact Investments | Fairfax Financial vs. Upstart Investments | Fairfax Financial vs. Atrium Mortgage 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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