Correlation Between Fairfax Financial and ROKMASTER Resources
Can any of the company-specific risk be diversified away by investing in both Fairfax Financial and ROKMASTER 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 Financial and ROKMASTER Resources 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 ROKMASTER Resources Corp, you can compare the effects of market volatilities on Fairfax Financial and ROKMASTER 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 Financial with a short position of ROKMASTER Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fairfax Financial and ROKMASTER Resources.
Diversification Opportunities for Fairfax Financial and ROKMASTER Resources
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fairfax and ROKMASTER is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Fairfax Financial Holdings and ROKMASTER Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ROKMASTER Resources Corp 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 ROKMASTER Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ROKMASTER Resources Corp has no effect on the direction of Fairfax Financial i.e., Fairfax Financial and ROKMASTER Resources go up and down completely randomly.
Pair Corralation between Fairfax Financial and ROKMASTER Resources
Assuming the 90 days trading horizon Fairfax Financial is expected to generate 2.06 times less return on investment than ROKMASTER Resources. But when comparing it to its historical volatility, Fairfax Financial Holdings is 10.28 times less risky than ROKMASTER Resources. It trades about 0.09 of its potential returns per unit of risk. ROKMASTER Resources Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 9.50 in ROKMASTER Resources Corp on September 25, 2024 and sell it today you would lose (7.50) from holding ROKMASTER Resources Corp or give up 78.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fairfax Financial Holdings vs. ROKMASTER Resources Corp
Performance |
| Timeline |
| Fairfax Financial |
| ROKMASTER Resources Corp |
Fairfax Financial and ROKMASTER Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fairfax Financial and ROKMASTER Resources
The main advantage of trading using opposite Fairfax Financial and ROKMASTER Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fairfax Financial position performs unexpectedly, ROKMASTER 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 ROKMASTER Resources will offset losses from the drop in ROKMASTER Resources' long position.| Fairfax Financial vs. Canso Credit Trust | Fairfax Financial vs. Canadian Imperial Bank | Fairfax Financial vs. Maple Leaf Foods | Fairfax Financial vs. Leveljump Healthcare Corp |
| ROKMASTER Resources vs. Monarca Minerals | ROKMASTER Resources vs. Outcrop Gold Corp | ROKMASTER Resources vs. Grande Portage Resources | ROKMASTER Resources vs. Klondike Silver Corp |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |