Correlation Between Fairfax Financial and Progressive Corp
Can any of the company-specific risk be diversified away by investing in both Fairfax Financial and Progressive Corp 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 Progressive Corp 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 Progressive Corp, you can compare the effects of market volatilities on Fairfax Financial and Progressive Corp 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 Progressive Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fairfax Financial and Progressive Corp.
Diversification Opportunities for Fairfax Financial and Progressive Corp
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fairfax and Progressive is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fairfax Financial Holdings and Progressive Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Progressive 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 Progressive Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Progressive Corp has no effect on the direction of Fairfax Financial i.e., Fairfax Financial and Progressive Corp go up and down completely randomly.
Pair Corralation between Fairfax Financial and Progressive Corp
If you would invest 23,883 in Progressive Corp on November 9, 2024 and sell it today you would earn a total of 1,252 from holding Progressive Corp or generate 5.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Fairfax Financial Holdings vs. Progressive Corp
Performance |
| Timeline |
| Fairfax Financial |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Progressive Corp |
Fairfax Financial and Progressive Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fairfax Financial and Progressive Corp
The main advantage of trading using opposite Fairfax Financial and Progressive Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fairfax Financial position performs unexpectedly, Progressive Corp 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 Progressive Corp will offset losses from the drop in Progressive Corp's long position.| Fairfax Financial vs. RLI Corp | Fairfax Financial vs. Chubb | Fairfax Financial vs. Progressive Corp | Fairfax Financial vs. White Mountains Insurance |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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