Correlation Between Fairfax Financial and Genesis Land
Can any of the company-specific risk be diversified away by investing in both Fairfax Financial and Genesis Land 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 Genesis Land 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 Genesis Land Development, you can compare the effects of market volatilities on Fairfax Financial and Genesis Land 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 Genesis Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fairfax Financial and Genesis Land.
Diversification Opportunities for Fairfax Financial and Genesis Land
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fairfax and Genesis is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Fairfax Financial Holdings and Genesis Land Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genesis Land Development 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 Genesis Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genesis Land Development has no effect on the direction of Fairfax Financial i.e., Fairfax Financial and Genesis Land go up and down completely randomly.
Pair Corralation between Fairfax Financial and Genesis Land
Assuming the 90 days trading horizon Fairfax Financial Holdings is expected to generate 1.09 times more return on investment than Genesis Land. However, Fairfax Financial is 1.09 times more volatile than Genesis Land Development. It trades about 0.24 of its potential returns per unit of risk. Genesis Land Development is currently generating about -0.07 per unit of risk. If you would invest 174,999 in Fairfax Financial Holdings on August 28, 2024 and sell it today you would earn a total of 20,510 from holding Fairfax Financial Holdings or generate 11.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fairfax Financial Holdings vs. Genesis Land Development
Performance |
| Timeline |
| Fairfax Financial |
| Genesis Land Development |
Fairfax Financial and Genesis Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fairfax Financial and Genesis Land
The main advantage of trading using opposite Fairfax Financial and Genesis Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fairfax Financial position performs unexpectedly, Genesis Land 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 Genesis Land will offset losses from the drop in Genesis Land's long position.| Fairfax Financial vs. Intact Financial | Fairfax Financial vs. iA Financial | Fairfax Financial vs. TMX Group Limited | Fairfax Financial vs. Onex Corp |
| Genesis Land vs. Melcor Developments | Genesis Land vs. Mainstreet Equity Corp | Genesis Land vs. Madison Pacific Properties | Genesis Land vs. Morguard |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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