Correlation Between Fairfax Financial and Enduro Metals
Can any of the company-specific risk be diversified away by investing in both Fairfax Financial and Enduro Metals 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 Enduro Metals 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 Enduro Metals Corp, you can compare the effects of market volatilities on Fairfax Financial and Enduro Metals 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 Enduro Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fairfax Financial and Enduro Metals.
Diversification Opportunities for Fairfax Financial and Enduro Metals
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fairfax and Enduro is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Fairfax Financial Holdings and Enduro Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enduro Metals 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 Enduro Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enduro Metals Corp has no effect on the direction of Fairfax Financial i.e., Fairfax Financial and Enduro Metals go up and down completely randomly.
Pair Corralation between Fairfax Financial and Enduro Metals
Assuming the 90 days trading horizon Fairfax Financial Holdings is expected to generate 0.07 times more return on investment than Enduro Metals. However, Fairfax Financial Holdings is 13.37 times less risky than Enduro Metals. It trades about 0.28 of its potential returns per unit of risk. Enduro Metals Corp is currently generating about -0.05 per unit of risk. If you would invest 2,385 in Fairfax Financial Holdings on October 21, 2024 and sell it today you would earn a total of 65.00 from holding Fairfax Financial Holdings or generate 2.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fairfax Financial Holdings vs. Enduro Metals Corp
Performance |
| Timeline |
| Fairfax Financial |
| Enduro Metals Corp |
Fairfax Financial and Enduro Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fairfax Financial and Enduro Metals
The main advantage of trading using opposite Fairfax Financial and Enduro Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fairfax Financial position performs unexpectedly, Enduro Metals 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 Enduro Metals will offset losses from the drop in Enduro Metals' long position.| Fairfax Financial vs. Blackrock Silver Corp | Fairfax Financial vs. Data Communications Management | Fairfax Financial vs. UnitedHealth Group CDR | Fairfax Financial vs. Bausch Health Companies |
| Enduro Metals vs. Scottie Resources Corp | Enduro Metals vs. Goliath Resources | Enduro Metals vs. Tudor Gold Corp | Enduro Metals vs. Brixton Metals |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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