Correlation Between SPTSX Dividend and Fairfax Fin
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By analyzing existing cross correlation between SPTSX Dividend Aristocrats and Fairfax Fin Hld, you can compare the effects of market volatilities on SPTSX Dividend and Fairfax Fin 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 SPTSX Dividend with a short position of Fairfax Fin. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPTSX Dividend and Fairfax Fin.
Diversification Opportunities for SPTSX Dividend and Fairfax Fin
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPTSX and Fairfax is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding SPTSX Dividend Aristocrats and Fairfax Fin Hld in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fairfax Fin Hld and SPTSX Dividend 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 SPTSX Dividend Aristocrats are associated (or correlated) with Fairfax Fin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fairfax Fin Hld has no effect on the direction of SPTSX Dividend i.e., SPTSX Dividend and Fairfax Fin go up and down completely randomly.
Pair Corralation between SPTSX Dividend and Fairfax Fin
Assuming the 90 days trading horizon SPTSX Dividend is expected to generate 1.23 times less return on investment than Fairfax Fin. But when comparing it to its historical volatility, SPTSX Dividend Aristocrats is 1.44 times less risky than Fairfax Fin. It trades about 0.17 of its potential returns per unit of risk. Fairfax Fin Hld is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,880 in Fairfax Fin Hld on August 25, 2024 and sell it today you would earn a total of 630.00 from holding Fairfax Fin Hld or generate 33.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.2% |
| Values | Daily Returns |
SPTSX Dividend Aristocrats vs. Fairfax Fin Hld
Performance |
| Timeline |
SPTSX Dividend and Fairfax Fin Volatility Contrast
Predicted Return Density |
| Returns |
SPTSX Dividend Aristocrats
Pair trading matchups for SPTSX Dividend
Fairfax Fin Hld
Pair trading matchups for Fairfax Fin
Pair Trading with SPTSX Dividend and Fairfax Fin
The main advantage of trading using opposite SPTSX Dividend and Fairfax Fin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPTSX Dividend position performs unexpectedly, Fairfax Fin 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 Fin will offset losses from the drop in Fairfax Fin's long position.| SPTSX Dividend vs. Contagious Gaming | SPTSX Dividend vs. Gamehost | SPTSX Dividend vs. Ramp Metals | SPTSX Dividend vs. Air Canada |
| Fairfax Fin vs. Intact Financial | Fairfax Fin vs. Fairfax Financial Holdings | Fairfax Fin vs. Fairfax Financial Holdings | Fairfax Fin vs. Intact Financial Corp |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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