Correlation Between The Fairholme and The Fairholme
Can any of the company-specific risk be diversified away by investing in both The Fairholme and The Fairholme 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 The Fairholme and The Fairholme into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Fairholme Focused and The Fairholme Fund, you can compare the effects of market volatilities on The Fairholme and The Fairholme 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 The Fairholme with a short position of The Fairholme. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Fairholme and The Fairholme.
Diversification Opportunities for The Fairholme and The Fairholme
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between The and The is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding The Fairholme Focused and The Fairholme Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Fairholme and The Fairholme 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 The Fairholme Focused are associated (or correlated) with The Fairholme. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Fairholme has no effect on the direction of The Fairholme i.e., The Fairholme and The Fairholme go up and down completely randomly.
Pair Corralation between The Fairholme and The Fairholme
Assuming the 90 days horizon The Fairholme is expected to generate 1.33 times less return on investment than The Fairholme. But when comparing it to its historical volatility, The Fairholme Focused is 3.69 times less risky than The Fairholme. It trades about 0.14 of its potential returns per unit of risk. The Fairholme Fund is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,363 in The Fairholme Fund on August 30, 2024 and sell it today you would earn a total of 937.00 from holding The Fairholme Fund or generate 39.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Fairholme Focused vs. The Fairholme Fund
Performance |
| Timeline |
| Fairholme Focused |
| The Fairholme |
The Fairholme and The Fairholme Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Fairholme and The Fairholme
The main advantage of trading using opposite The Fairholme and The Fairholme positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Fairholme position performs unexpectedly, The Fairholme 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 The Fairholme will offset losses from the drop in The Fairholme's long position.| The Fairholme vs. Vanguard Wellesley Income | The Fairholme vs. HUMANA INC | The Fairholme vs. Aquagold International | The Fairholme vs. Barloworld Ltd ADR |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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