Correlation Between The Fairholme and Fpa Crescent
Can any of the company-specific risk be diversified away by investing in both The Fairholme and Fpa Crescent 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 The Fairholme and Fpa Crescent 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 Fpa Crescent Fund, you can compare the effects of market volatilities on The Fairholme and Fpa Crescent 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 The Fairholme with a short position of Fpa Crescent. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Fairholme and Fpa Crescent.
Diversification Opportunities for The Fairholme and Fpa Crescent
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between The and Fpa is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding The Fairholme Fund and Fpa Crescent Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fpa Crescent and The Fairholme 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 Fpa Crescent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fpa Crescent has no effect on the direction of The Fairholme i.e., The Fairholme and Fpa Crescent go up and down completely randomly.
Pair Corralation between The Fairholme and Fpa Crescent
Assuming the 90 days horizon The Fairholme Fund is expected to generate 1.39 times more return on investment than Fpa Crescent. However, The Fairholme is 1.39 times more volatile than Fpa Crescent Fund. It trades about -0.15 of its potential returns per unit of risk. Fpa Crescent Fund is currently generating about -0.29 per unit of risk. If you would invest 3,040 in The Fairholme Fund on January 8, 2025 and sell it today you would lose (158.00) from holding The Fairholme Fund or give up 5.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
The Fairholme Fund vs. Fpa Crescent Fund
Performance |
| Timeline |
| The Fairholme |
| Fpa Crescent |
The Fairholme and Fpa Crescent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Fairholme and Fpa Crescent
The main advantage of trading using opposite The Fairholme and Fpa Crescent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Fairholme position performs unexpectedly, Fpa Crescent 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 Fpa Crescent will offset losses from the drop in Fpa Crescent's long position.| The Fairholme vs. Dodge Cox Stock | The Fairholme vs. Virtus Nfj Large Cap | The Fairholme vs. Tiaa Cref Large Cap Value | The Fairholme vs. Vest Large Cap |
| Fpa Crescent vs. Permanent Portfolio Class | Fpa Crescent vs. Amg Yacktman Fund | Fpa Crescent vs. Berwyn Income Fund | Fpa Crescent vs. First Eagle Global |
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.
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