Correlation Between Dream Office and Fairfax Financial
Can any of the company-specific risk be diversified away by investing in both Dream Office 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 Dream Office and Fairfax Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dream Office Real and Fairfax Financial Holdings, you can compare the effects of market volatilities on Dream Office 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 Dream Office with a short position of Fairfax Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dream Office and Fairfax Financial.
Diversification Opportunities for Dream Office and Fairfax Financial
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dream and Fairfax is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Dream Office Real and Fairfax Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fairfax Financial and Dream Office 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 Dream Office Real 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 Dream Office i.e., Dream Office and Fairfax Financial go up and down completely randomly.
Pair Corralation between Dream Office and Fairfax Financial
Assuming the 90 days trading horizon Dream Office Real is expected to under-perform the Fairfax Financial. In addition to that, Dream Office is 2.93 times more volatile than Fairfax Financial Holdings. It trades about -0.03 of its total potential returns per unit of risk. Fairfax Financial Holdings is currently generating about 0.1 per unit of volatility. If you would invest 1,396 in Fairfax Financial Holdings on September 20, 2024 and sell it today you would earn a total of 784.00 from holding Fairfax Financial Holdings or generate 56.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dream Office Real vs. Fairfax Financial Holdings
Performance |
| Timeline |
| Dream Office Real |
| Fairfax Financial |
Dream Office and Fairfax Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dream Office and Fairfax Financial
The main advantage of trading using opposite Dream Office and Fairfax Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dream Office 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.| Dream Office vs. Granite Real Estate | Dream Office vs. Choice Properties Real | Dream Office vs. HR Real Estate |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Commodity Directory Find actively traded commodities issued by global exchanges |