Correlation Between Fairfax Fin and Perimeter Medical
Can any of the company-specific risk be diversified away by investing in both Fairfax Fin and Perimeter Medical 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 Perimeter Medical 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 Perimeter Medical Imaging, you can compare the effects of market volatilities on Fairfax Fin and Perimeter Medical 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 Perimeter Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fairfax Fin and Perimeter Medical.
Diversification Opportunities for Fairfax Fin and Perimeter Medical
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fairfax and Perimeter is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Fairfax Fin Hld and Perimeter Medical Imaging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perimeter Medical Imaging 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 Perimeter Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perimeter Medical Imaging has no effect on the direction of Fairfax Fin i.e., Fairfax Fin and Perimeter Medical go up and down completely randomly.
Pair Corralation between Fairfax Fin and Perimeter Medical
Assuming the 90 days trading horizon Fairfax Fin Hld is expected to generate 0.18 times more return on investment than Perimeter Medical. However, Fairfax Fin Hld is 5.61 times less risky than Perimeter Medical. It trades about 0.12 of its potential returns per unit of risk. Perimeter Medical Imaging is currently generating about -0.02 per unit of risk. If you would invest 1,561 in Fairfax Fin Hld on September 12, 2024 and sell it today you would earn a total of 962.00 from holding Fairfax Fin Hld or generate 61.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fairfax Fin Hld vs. Perimeter Medical Imaging
Performance |
| Timeline |
| Fairfax Fin Hld |
| Perimeter Medical Imaging |
Fairfax Fin and Perimeter Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fairfax Fin and Perimeter Medical
The main advantage of trading using opposite Fairfax Fin and Perimeter Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fairfax Fin position performs unexpectedly, Perimeter Medical 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 Perimeter Medical will offset losses from the drop in Perimeter Medical's 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 |
| Perimeter Medical vs. Premium Income | Perimeter Medical vs. E L Financial Corp | Perimeter Medical vs. Fairfax Financial Holdings | Perimeter Medical 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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