Correlation Between Fairfax Financial and XXIX Metal
Can any of the company-specific risk be diversified away by investing in both Fairfax Financial and XXIX Metal 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 XXIX Metal 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 XXIX Metal Corp, you can compare the effects of market volatilities on Fairfax Financial and XXIX Metal 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 XXIX Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fairfax Financial and XXIX Metal.
Diversification Opportunities for Fairfax Financial and XXIX Metal
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fairfax and XXIX is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Fairfax Financial Holdings and XXIX Metal Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XXIX Metal 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 XXIX Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XXIX Metal Corp has no effect on the direction of Fairfax Financial i.e., Fairfax Financial and XXIX Metal go up and down completely randomly.
Pair Corralation between Fairfax Financial and XXIX Metal
Assuming the 90 days trading horizon Fairfax Financial Holdings is expected to generate 0.13 times more return on investment than XXIX Metal. However, Fairfax Financial Holdings is 7.88 times less risky than XXIX Metal. It trades about -0.06 of its potential returns per unit of risk. XXIX Metal Corp is currently generating about -0.1 per unit of risk. If you would invest 2,445 in Fairfax Financial Holdings on November 5, 2024 and sell it today you would lose (13.00) from holding Fairfax Financial Holdings or give up 0.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fairfax Financial Holdings vs. XXIX Metal Corp
Performance |
| Timeline |
| Fairfax Financial |
| XXIX Metal Corp |
Fairfax Financial and XXIX Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fairfax Financial and XXIX Metal
The main advantage of trading using opposite Fairfax Financial and XXIX Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fairfax Financial position performs unexpectedly, XXIX Metal 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 XXIX Metal will offset losses from the drop in XXIX Metal's long position.| Fairfax Financial vs. Goodfood Market Corp | Fairfax Financial vs. Quorum Information Technologies | Fairfax Financial vs. Cogeco Communications | Fairfax Financial vs. Sangoma Technologies Corp |
| XXIX Metal vs. First Quantum Minerals | XXIX Metal vs. Lundin Mining | XXIX Metal vs. Capstone Mining Corp | XXIX Metal vs. HudBay 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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |