Correlation Between Enbridge Pref and Fairfax Financial
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By analyzing existing cross correlation between Enbridge Pref 15 and Fairfax Financial Holdings, you can compare the effects of market volatilities on Enbridge Pref 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 Enbridge Pref with a short position of Fairfax Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enbridge Pref and Fairfax Financial.
Diversification Opportunities for Enbridge Pref and Fairfax Financial
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Enbridge and Fairfax is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Enbridge Pref 15 and Fairfax Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fairfax Financial and Enbridge Pref 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 Enbridge Pref 15 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 Enbridge Pref i.e., Enbridge Pref and Fairfax Financial go up and down completely randomly.
Pair Corralation between Enbridge Pref and Fairfax Financial
Assuming the 90 days trading horizon Enbridge Pref 15 is expected to generate 1.18 times more return on investment than Fairfax Financial. However, Enbridge Pref is 1.18 times more volatile than Fairfax Financial Holdings. It trades about 0.35 of its potential returns per unit of risk. Fairfax Financial Holdings is currently generating about 0.29 per unit of risk. If you would invest 1,851 in Enbridge Pref 15 on October 12, 2024 and sell it today you would earn a total of 100.00 from holding Enbridge Pref 15 or generate 5.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enbridge Pref 15 vs. Fairfax Financial Holdings
Performance |
| Timeline |
| Enbridge Pref 15 |
| Fairfax Financial |
Enbridge Pref and Fairfax Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enbridge Pref and Fairfax Financial
The main advantage of trading using opposite Enbridge Pref and Fairfax Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enbridge Pref 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.| Enbridge Pref vs. Fairfax Financial Holdings | Enbridge Pref vs. T2 Metals Corp | Enbridge Pref vs. Osisko Metals | Enbridge Pref vs. North American Financial |
| Fairfax Financial vs. Contagious Gaming | Fairfax Financial vs. East Side Games | Fairfax Financial vs. Atrium Mortgage Investment | Fairfax Financial vs. Computer Modelling Group |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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