Correlation Between Forsys Metals and Fairfax Financial
Can any of the company-specific risk be diversified away by investing in both Forsys Metals and Fairfax Financial 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 Forsys Metals and Fairfax Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forsys Metals Corp and Fairfax Financial Holdings, you can compare the effects of market volatilities on Forsys Metals and Fairfax Financial 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 Forsys Metals with a short position of Fairfax Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forsys Metals and Fairfax Financial.
Diversification Opportunities for Forsys Metals and Fairfax Financial
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Forsys and Fairfax is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Forsys Metals Corp and Fairfax Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fairfax Financial and Forsys Metals 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 Forsys Metals Corp are associated (or correlated) with Fairfax Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fairfax Financial has no effect on the direction of Forsys Metals i.e., Forsys Metals and Fairfax Financial go up and down completely randomly.
Pair Corralation between Forsys Metals and Fairfax Financial
Assuming the 90 days trading horizon Forsys Metals Corp is expected to generate 12.64 times more return on investment than Fairfax Financial. However, Forsys Metals is 12.64 times more volatile than Fairfax Financial Holdings. It trades about 0.09 of its potential returns per unit of risk. Fairfax Financial Holdings is currently generating about 0.27 per unit of risk. If you would invest 61.00 in Forsys Metals Corp on September 14, 2024 and sell it today you would earn a total of 4.00 from holding Forsys Metals Corp or generate 6.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Forsys Metals Corp vs. Fairfax Financial Holdings
Performance |
| Timeline |
| Forsys Metals Corp |
| Fairfax Financial |
Forsys Metals and Fairfax Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forsys Metals and Fairfax Financial
The main advantage of trading using opposite Forsys Metals and Fairfax Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forsys Metals position performs unexpectedly, Fairfax Financial 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 Fairfax Financial will offset losses from the drop in Fairfax Financial's long position.| Forsys Metals vs. Laramide Resources | Forsys Metals vs. enCore Energy Corp | Forsys Metals vs. CanAlaska Uranium | Forsys Metals vs. Anfield Resources |
| Fairfax Financial vs. Enerev5 Metals | Fairfax Financial vs. Talon Metals Corp | Fairfax Financial vs. Forsys Metals Corp | Fairfax Financial vs. Andlauer Healthcare Gr |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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