Correlation Between Fairholme Fund and Fairholme Focused
Can any of the company-specific risk be diversified away by investing in both Fairholme Fund and Fairholme Focused 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 Fairholme Fund and Fairholme Focused into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Fairholme Fund and The Fairholme Focused, you can compare the effects of market volatilities on Fairholme Fund and Fairholme Focused 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 Fairholme Fund with a short position of Fairholme Focused. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fairholme Fund and Fairholme Focused.
Diversification Opportunities for Fairholme Fund and Fairholme Focused
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fairholme and Fairholme is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding The Fairholme Fund and The Fairholme Focused in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fairholme Focused and Fairholme Fund 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 The Fairholme Fund are associated (or correlated) with Fairholme Focused. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fairholme Focused has no effect on the direction of Fairholme Fund i.e., Fairholme Fund and Fairholme Focused go up and down completely randomly.
Pair Corralation between Fairholme Fund and Fairholme Focused
Assuming the 90 days horizon The Fairholme Fund is expected to generate 3.73 times more return on investment than Fairholme Focused. However, Fairholme Fund is 3.73 times more volatile than The Fairholme Focused. It trades about 0.04 of its potential returns per unit of risk. The Fairholme Focused is currently generating about 0.13 per unit of risk. If you would invest 2,491 in The Fairholme Fund on September 14, 2024 and sell it today you would earn a total of 609.00 from holding The Fairholme Fund or generate 24.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
The Fairholme Fund vs. The Fairholme Focused
Performance |
| Timeline |
| Fairholme Fund |
| Fairholme Focused |
Fairholme Fund and Fairholme Focused Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fairholme Fund and Fairholme Focused
The main advantage of trading using opposite Fairholme Fund and Fairholme Focused positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fairholme Fund position performs unexpectedly, Fairholme Focused 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 Fairholme Focused will offset losses from the drop in Fairholme Focused's long position.| Fairholme Fund vs. Ab Small Cap | Fairholme Fund vs. Small Pany Growth | Fairholme Fund vs. Kinetics Small Cap | Fairholme Fund vs. Df Dent Small |
| Fairholme Focused vs. The Fairholme Fund | Fairholme Focused vs. Fidelity Magellan Fund | Fairholme Focused vs. Fidelity Telecom And | Fairholme Focused vs. Equity Growth Fund |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |