Correlation Between Fairfax Fin and Great West
Can any of the company-specific risk be diversified away by investing in both Fairfax Fin and Great West 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 Fairfax Fin and Great West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fairfax Fin Hld and Great West Lifeco, you can compare the effects of market volatilities on Fairfax Fin and Great West 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 Fairfax Fin with a short position of Great West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fairfax Fin and Great West.
Diversification Opportunities for Fairfax Fin and Great West
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fairfax and Great is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Fairfax Fin Hld and Great West Lifeco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Lifeco and Fairfax Fin 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 Fairfax Fin Hld are associated (or correlated) with Great West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Lifeco has no effect on the direction of Fairfax Fin i.e., Fairfax Fin and Great West go up and down completely randomly.
Pair Corralation between Fairfax Fin and Great West
If you would invest 2,499 in Fairfax Fin Hld on November 1, 2024 and sell it today you would earn a total of 0.00 from holding Fairfax Fin Hld or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 9.09% |
| Values | Daily Returns |
Fairfax Fin Hld vs. Great West Lifeco
Performance |
| Timeline |
| Fairfax Fin Hld |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Great West Lifeco |
Fairfax Fin and Great West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fairfax Fin and Great West
The main advantage of trading using opposite Fairfax Fin and Great West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fairfax Fin position performs unexpectedly, Great West 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 Great West will offset losses from the drop in Great West's long position.| Fairfax Fin vs. Osisko Metals | Fairfax Fin vs. South Pacific Metals | Fairfax Fin vs. Solid Impact Investments | Fairfax Fin vs. CNJ Capital Investments |
| Great West vs. Sun Life Financial | Great West vs. Power | Great West vs. Manulife Financial Corp | Great West vs. National Bank of |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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