Correlation Between Fairfax Fin and GoGold Resources
Can any of the company-specific risk be diversified away by investing in both Fairfax Fin and GoGold Resources 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 GoGold Resources 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 GoGold Resources, you can compare the effects of market volatilities on Fairfax Fin and GoGold Resources 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 GoGold Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fairfax Fin and GoGold Resources.
Diversification Opportunities for Fairfax Fin and GoGold Resources
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fairfax and GoGold is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Fairfax Fin Hld and GoGold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoGold Resources 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 GoGold Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoGold Resources has no effect on the direction of Fairfax Fin i.e., Fairfax Fin and GoGold Resources go up and down completely randomly.
Pair Corralation between Fairfax Fin and GoGold Resources
Assuming the 90 days trading horizon Fairfax Fin is expected to generate 10.54 times less return on investment than GoGold Resources. But when comparing it to its historical volatility, Fairfax Fin Hld is 6.71 times less risky than GoGold Resources. It trades about 0.23 of its potential returns per unit of risk. GoGold Resources is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 120.00 in GoGold Resources on November 3, 2024 and sell it today you would earn a total of 34.00 from holding GoGold Resources or generate 28.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fairfax Fin Hld vs. GoGold Resources
Performance |
| Timeline |
| Fairfax Fin Hld |
| GoGold Resources |
Fairfax Fin and GoGold Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fairfax Fin and GoGold Resources
The main advantage of trading using opposite Fairfax Fin and GoGold Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fairfax Fin position performs unexpectedly, GoGold Resources 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 GoGold Resources will offset losses from the drop in GoGold Resources' long position.| Fairfax Fin vs. Sun Peak Metals | Fairfax Fin vs. InPlay Oil Corp | Fairfax Fin vs. Andean Precious Metals | Fairfax Fin vs. TGS Esports |
| GoGold Resources vs. Defiance Silver Corp | GoGold Resources vs. Liberty Gold Corp | GoGold Resources vs. Dolly Varden Silver | GoGold Resources vs. Minaurum Gold |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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