Correlation Between Fairfax Financial and Summa Silver
Can any of the company-specific risk be diversified away by investing in both Fairfax Financial and Summa Silver 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 Summa Silver 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 Summa Silver Corp, you can compare the effects of market volatilities on Fairfax Financial and Summa Silver 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 Summa Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fairfax Financial and Summa Silver.
Diversification Opportunities for Fairfax Financial and Summa Silver
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fairfax and Summa is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Fairfax Financial Holdings and Summa Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summa Silver 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 Summa Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summa Silver Corp has no effect on the direction of Fairfax Financial i.e., Fairfax Financial and Summa Silver go up and down completely randomly.
Pair Corralation between Fairfax Financial and Summa Silver
Assuming the 90 days trading horizon Fairfax Financial is expected to generate 18.4 times less return on investment than Summa Silver. But when comparing it to its historical volatility, Fairfax Financial Holdings is 12.89 times less risky than Summa Silver. It trades about 0.1 of its potential returns per unit of risk. Summa Silver Corp is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 28.00 in Summa Silver Corp on November 3, 2024 and sell it today you would earn a total of 5.00 from holding Summa Silver Corp or generate 17.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fairfax Financial Holdings vs. Summa Silver Corp
Performance |
| Timeline |
| Fairfax Financial |
| Summa Silver Corp |
Fairfax Financial and Summa Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fairfax Financial and Summa Silver
The main advantage of trading using opposite Fairfax Financial and Summa Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fairfax Financial position performs unexpectedly, Summa Silver 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 Summa Silver will offset losses from the drop in Summa Silver's long position.| Fairfax Financial vs. Genius Metals | Fairfax Financial vs. Algoma Steel Group | Fairfax Financial vs. Ramp Metals | Fairfax Financial vs. Andean Precious Metals |
| Summa Silver vs. Guanajuato Silver | Summa Silver vs. AbraSilver Resource Corp | Summa Silver vs. Blackrock Silver Corp | Summa Silver vs. Silver Viper Minerals |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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