Correlation Between Fairfax Financial and Canaccord Genuity
Can any of the company-specific risk be diversified away by investing in both Fairfax Financial and Canaccord Genuity 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 Financial and Canaccord Genuity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fairfax Financial Holdings and Canaccord Genuity Group, you can compare the effects of market volatilities on Fairfax Financial and Canaccord Genuity 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 Financial with a short position of Canaccord Genuity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fairfax Financial and Canaccord Genuity.
Diversification Opportunities for Fairfax Financial and Canaccord Genuity
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fairfax and Canaccord is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Fairfax Financial Holdings and Canaccord Genuity Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canaccord Genuity and Fairfax Financial 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 Financial Holdings are associated (or correlated) with Canaccord Genuity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canaccord Genuity has no effect on the direction of Fairfax Financial i.e., Fairfax Financial and Canaccord Genuity go up and down completely randomly.
Pair Corralation between Fairfax Financial and Canaccord Genuity
Assuming the 90 days trading horizon Fairfax Financial Holdings is expected to generate 0.49 times more return on investment than Canaccord Genuity. However, Fairfax Financial Holdings is 2.03 times less risky than Canaccord Genuity. It trades about 0.12 of its potential returns per unit of risk. Canaccord Genuity Group is currently generating about 0.06 per unit of risk. If you would invest 1,504 in Fairfax Financial Holdings on September 12, 2024 and sell it today you would earn a total of 707.00 from holding Fairfax Financial Holdings or generate 47.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fairfax Financial Holdings vs. Canaccord Genuity Group
Performance |
| Timeline |
| Fairfax Financial |
| Canaccord Genuity |
Fairfax Financial and Canaccord Genuity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fairfax Financial and Canaccord Genuity
The main advantage of trading using opposite Fairfax Financial and Canaccord Genuity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fairfax Financial position performs unexpectedly, Canaccord Genuity 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 Canaccord Genuity will offset losses from the drop in Canaccord Genuity's long position.| Fairfax Financial vs. NeuPath Health | Fairfax Financial vs. Jamieson Wellness | Fairfax Financial vs. Solid Impact Investments | Fairfax Financial vs. Westshore Terminals Investment |
| Canaccord Genuity vs. CI Financial Corp | Canaccord Genuity vs. ECN Capital Corp | Canaccord Genuity vs. Element Fleet Management | Canaccord Genuity vs. Martinrea International |
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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