Correlation Between Fairfax Financial and Touchstone Exploration
Can any of the company-specific risk be diversified away by investing in both Fairfax Financial and Touchstone Exploration 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 Touchstone Exploration 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 Touchstone Exploration, you can compare the effects of market volatilities on Fairfax Financial and Touchstone Exploration 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 Touchstone Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fairfax Financial and Touchstone Exploration.
Diversification Opportunities for Fairfax Financial and Touchstone Exploration
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fairfax and Touchstone is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Fairfax Financial Holdings and Touchstone Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Exploration 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 Touchstone Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Exploration has no effect on the direction of Fairfax Financial i.e., Fairfax Financial and Touchstone Exploration go up and down completely randomly.
Pair Corralation between Fairfax Financial and Touchstone Exploration
If you would invest 2,225 in Fairfax Financial Holdings on November 4, 2024 and sell it today you would earn a total of 55.00 from holding Fairfax Financial Holdings or generate 2.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 0.0% |
| Values | Daily Returns |
Fairfax Financial Holdings vs. Touchstone Exploration
Performance |
| Timeline |
| Fairfax Financial |
| Touchstone Exploration |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Fairfax Financial and Touchstone Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fairfax Financial and Touchstone Exploration
The main advantage of trading using opposite Fairfax Financial and Touchstone Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fairfax Financial position performs unexpectedly, Touchstone Exploration 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 Touchstone Exploration will offset losses from the drop in Touchstone Exploration's long position.| Fairfax Financial vs. Primaris Retail RE | Fairfax Financial vs. Micron Technology, | Fairfax Financial vs. Firan Technology Group | Fairfax Financial vs. Constellation Software |
| Touchstone Exploration vs. Headwater Exploration | Touchstone Exploration vs. Gear Energy | Touchstone Exploration vs. InPlay Oil Corp | Touchstone Exploration vs. Gran Tierra Energy |
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 CEOs Directory module to screen CEOs from public companies around the world.
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