Correlation Between Canaf Investments and Fairfax Financial
Can any of the company-specific risk be diversified away by investing in both Canaf Investments 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 Canaf Investments and Fairfax Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canaf Investments and Fairfax Financial Holdings, you can compare the effects of market volatilities on Canaf Investments 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 Canaf Investments with a short position of Fairfax Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canaf Investments and Fairfax Financial.
Diversification Opportunities for Canaf Investments and Fairfax Financial
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Canaf and Fairfax is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Canaf Investments and Fairfax Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fairfax Financial and Canaf Investments 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 Canaf Investments 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 Canaf Investments i.e., Canaf Investments and Fairfax Financial go up and down completely randomly.
Pair Corralation between Canaf Investments and Fairfax Financial
Assuming the 90 days horizon Canaf Investments is expected to generate 4.51 times more return on investment than Fairfax Financial. However, Canaf Investments is 4.51 times more volatile than Fairfax Financial Holdings. It trades about 0.25 of its potential returns per unit of risk. Fairfax Financial Holdings is currently generating about 0.25 per unit of risk. If you would invest 28.00 in Canaf Investments on October 26, 2024 and sell it today you would earn a total of 11.00 from holding Canaf Investments or generate 39.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canaf Investments vs. Fairfax Financial Holdings
Performance |
| Timeline |
| Canaf Investments |
| Fairfax Financial |
Canaf Investments and Fairfax Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canaf Investments and Fairfax Financial
The main advantage of trading using opposite Canaf Investments and Fairfax Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canaf Investments 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.| Canaf Investments vs. Forsys Metals Corp | Canaf Investments vs. Lion One Metals | Canaf Investments vs. Marimaca Copper Corp | Canaf Investments vs. NeXGold Mining Corp |
| Fairfax Financial vs. XXIX Metal Corp | Fairfax Financial vs. NeXGold Mining Corp | Fairfax Financial vs. Canaf Investments | Fairfax Financial vs. Magna Mining |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Global Correlations Find global opportunities by holding instruments from different markets |