Correlation Between Fairfax Financial and Dividend
Can any of the company-specific risk be diversified away by investing in both Fairfax Financial and Dividend 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 Dividend 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 Dividend 15 Split, you can compare the effects of market volatilities on Fairfax Financial and Dividend 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 Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fairfax Financial and Dividend.
Diversification Opportunities for Fairfax Financial and Dividend
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fairfax and Dividend is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Fairfax Financial Holdings and Dividend 15 Split in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dividend 15 Split 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 Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dividend 15 Split has no effect on the direction of Fairfax Financial i.e., Fairfax Financial and Dividend go up and down completely randomly.
Pair Corralation between Fairfax Financial and Dividend
Assuming the 90 days trading horizon Fairfax Financial Holdings is expected to generate 3.31 times more return on investment than Dividend. However, Fairfax Financial is 3.31 times more volatile than Dividend 15 Split. It trades about 0.1 of its potential returns per unit of risk. Dividend 15 Split is currently generating about 0.17 per unit of risk. If you would invest 1,570 in Fairfax Financial Holdings on November 1, 2024 and sell it today you would earn a total of 810.00 from holding Fairfax Financial Holdings or generate 51.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Fairfax Financial Holdings vs. Dividend 15 Split
Performance |
| Timeline |
| Fairfax Financial |
| Dividend 15 Split |
Fairfax Financial and Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fairfax Financial and Dividend
The main advantage of trading using opposite Fairfax Financial and Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fairfax Financial position performs unexpectedly, Dividend 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 Dividend will offset losses from the drop in Dividend's long position.| Fairfax Financial vs. Ramp Metals | Fairfax Financial vs. Mako Mining Corp | Fairfax Financial vs. Marimaca Copper Corp | Fairfax Financial vs. Metalero Mining Corp |
| Dividend vs. Fairfax Financial Holdings | Dividend vs. Fairfax Financial Holdings | Dividend vs. Fairfax Financial Holdings | Dividend vs. Fairfax Financial Holdings |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |