Correlation Between Fairfax Financial and Avante Logixx
Can any of the company-specific risk be diversified away by investing in both Fairfax Financial and Avante Logixx 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 Avante Logixx 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 Avante Logixx, you can compare the effects of market volatilities on Fairfax Financial and Avante Logixx 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 Avante Logixx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fairfax Financial and Avante Logixx.
Diversification Opportunities for Fairfax Financial and Avante Logixx
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fairfax and Avante is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Fairfax Financial Holdings and Avante Logixx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avante Logixx 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 Avante Logixx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avante Logixx has no effect on the direction of Fairfax Financial i.e., Fairfax Financial and Avante Logixx go up and down completely randomly.
Pair Corralation between Fairfax Financial and Avante Logixx
Assuming the 90 days trading horizon Fairfax Financial is expected to generate 10.08 times less return on investment than Avante Logixx. But when comparing it to its historical volatility, Fairfax Financial Holdings is 4.09 times less risky than Avante Logixx. It trades about 0.14 of its potential returns per unit of risk. Avante Logixx is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 81.00 in Avante Logixx on September 23, 2024 and sell it today you would earn a total of 36.00 from holding Avante Logixx or generate 44.44% 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. Avante Logixx
Performance |
| Timeline |
| Fairfax Financial |
| Avante Logixx |
Fairfax Financial and Avante Logixx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fairfax Financial and Avante Logixx
The main advantage of trading using opposite Fairfax Financial and Avante Logixx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fairfax Financial position performs unexpectedly, Avante Logixx 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 Avante Logixx will offset losses from the drop in Avante Logixx's long position.| Fairfax Financial vs. Identillect Technologies Corp | Fairfax Financial vs. Goodfood Market Corp | Fairfax Financial vs. Bragg Gaming Group | Fairfax Financial vs. Champion Gaming Group |
| Avante Logixx vs. Senvest Capital | Avante Logixx vs. Fairfax Financial Holdings | Avante Logixx vs. Bank of Montreal | Avante Logixx 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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