Correlation Between Fairfax Fin and OrganiGram Holdings
Can any of the company-specific risk be diversified away by investing in both Fairfax Fin and OrganiGram Holdings 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 OrganiGram Holdings 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 OrganiGram Holdings, you can compare the effects of market volatilities on Fairfax Fin and OrganiGram Holdings 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 OrganiGram Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fairfax Fin and OrganiGram Holdings.
Diversification Opportunities for Fairfax Fin and OrganiGram Holdings
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fairfax and OrganiGram is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Fairfax Fin Hld and OrganiGram Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OrganiGram Holdings 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 OrganiGram Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OrganiGram Holdings has no effect on the direction of Fairfax Fin i.e., Fairfax Fin and OrganiGram Holdings go up and down completely randomly.
Pair Corralation between Fairfax Fin and OrganiGram Holdings
Assuming the 90 days trading horizon Fairfax Fin is expected to generate 1.53 times less return on investment than OrganiGram Holdings. But when comparing it to its historical volatility, Fairfax Fin Hld is 5.83 times less risky than OrganiGram Holdings. It trades about 0.16 of its potential returns per unit of risk. OrganiGram Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 175.00 in OrganiGram Holdings on September 12, 2024 and sell it today you would earn a total of 42.00 from holding OrganiGram Holdings or generate 24.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fairfax Fin Hld vs. OrganiGram Holdings
Performance |
| Timeline |
| Fairfax Fin Hld |
| OrganiGram Holdings |
Fairfax Fin and OrganiGram Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fairfax Fin and OrganiGram Holdings
The main advantage of trading using opposite Fairfax Fin and OrganiGram Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fairfax Fin position performs unexpectedly, OrganiGram Holdings 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 OrganiGram Holdings will offset losses from the drop in OrganiGram Holdings' long position.| Fairfax Fin vs. Intact Financial | Fairfax Fin vs. Fairfax Financial Holdings | Fairfax Fin vs. Fairfax Financial Holdings | Fairfax Fin vs. Intact Financial Corp |
| OrganiGram Holdings vs. Premium Income | OrganiGram Holdings vs. E L Financial Corp | OrganiGram Holdings vs. Fairfax Financial Holdings | OrganiGram Holdings vs. Fairfax Fin Hld |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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