Correlation Between Fairfax Financial and Solid Impact
Can any of the company-specific risk be diversified away by investing in both Fairfax Financial and Solid Impact 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 Solid Impact 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 Solid Impact Investments, you can compare the effects of market volatilities on Fairfax Financial and Solid Impact 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 Solid Impact. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fairfax Financial and Solid Impact.
Diversification Opportunities for Fairfax Financial and Solid Impact
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fairfax and Solid is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fairfax Financial Holdings and Solid Impact Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solid Impact Investments 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 Solid Impact. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solid Impact Investments has no effect on the direction of Fairfax Financial i.e., Fairfax Financial and Solid Impact go up and down completely randomly.
Pair Corralation between Fairfax Financial and Solid Impact
Assuming the 90 days trading horizon Fairfax Financial Holdings is expected to generate 0.32 times more return on investment than Solid Impact. However, Fairfax Financial Holdings is 3.1 times less risky than Solid Impact. It trades about 0.07 of its potential returns per unit of risk. Solid Impact Investments is currently generating about -0.04 per unit of risk. If you would invest 1,801 in Fairfax Financial Holdings on October 16, 2024 and sell it today you would earn a total of 649.00 from holding Fairfax Financial Holdings or generate 36.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fairfax Financial Holdings vs. Solid Impact Investments
Performance |
| Timeline |
| Fairfax Financial |
| Solid Impact Investments |
Fairfax Financial and Solid Impact Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fairfax Financial and Solid Impact
The main advantage of trading using opposite Fairfax Financial and Solid Impact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fairfax Financial position performs unexpectedly, Solid Impact 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 Solid Impact will offset losses from the drop in Solid Impact's long position.| Fairfax Financial vs. Canadian Utilities Limited | Fairfax Financial vs. US Financial 15 | Fairfax Financial vs. NeXGold Mining Corp | Fairfax Financial vs. Advent Wireless |
| Solid Impact vs. Information Services | Solid Impact vs. Storage Vault Canada | Solid Impact vs. Precious Metals And | Solid Impact vs. Richelieu Hardware |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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