Correlation Between TUT Fitness and Fairfax Financial
Can any of the company-specific risk be diversified away by investing in both TUT Fitness 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 TUT Fitness and Fairfax Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TUT Fitness Group and Fairfax Financial Holdings, you can compare the effects of market volatilities on TUT Fitness 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 TUT Fitness with a short position of Fairfax Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of TUT Fitness and Fairfax Financial.
Diversification Opportunities for TUT Fitness and Fairfax Financial
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between TUT and Fairfax is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding TUT Fitness Group and Fairfax Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fairfax Financial and TUT Fitness 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 TUT Fitness Group 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 TUT Fitness i.e., TUT Fitness and Fairfax Financial go up and down completely randomly.
Pair Corralation between TUT Fitness and Fairfax Financial
Assuming the 90 days horizon TUT Fitness Group is expected to generate 25.22 times more return on investment than Fairfax Financial. However, TUT Fitness is 25.22 times more volatile than Fairfax Financial Holdings. It trades about 0.04 of its potential returns per unit of risk. Fairfax Financial Holdings is currently generating about 0.12 per unit of risk. If you would invest 40.00 in TUT Fitness Group on September 1, 2024 and sell it today you would lose (32.00) from holding TUT Fitness Group or give up 80.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TUT Fitness Group vs. Fairfax Financial Holdings
Performance |
| Timeline |
| TUT Fitness Group |
| Fairfax Financial |
TUT Fitness and Fairfax Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TUT Fitness and Fairfax Financial
The main advantage of trading using opposite TUT Fitness and Fairfax Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TUT Fitness 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.| TUT Fitness vs. Talon Metals Corp | TUT Fitness vs. CNJ Capital Investments | TUT Fitness vs. Solid Impact Investments | TUT Fitness vs. Diversified Royalty Corp |
| Fairfax Financial vs. Bird Construction | Fairfax Financial vs. Converge Technology Solutions | Fairfax Financial vs. Canaf Investments | Fairfax Financial vs. HPQ Silicon Resources |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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