Correlation Between Helios Fairfax and First Capital
Can any of the company-specific risk be diversified away by investing in both Helios Fairfax and First Capital 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 Helios Fairfax and First Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Helios Fairfax Partners and First Capital Real, you can compare the effects of market volatilities on Helios Fairfax and First Capital 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 Helios Fairfax with a short position of First Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Helios Fairfax and First Capital.
Diversification Opportunities for Helios Fairfax and First Capital
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Helios and First is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Helios Fairfax Partners and First Capital Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Capital Real and Helios Fairfax 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 Helios Fairfax Partners are associated (or correlated) with First Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Capital Real has no effect on the direction of Helios Fairfax i.e., Helios Fairfax and First Capital go up and down completely randomly.
Pair Corralation between Helios Fairfax and First Capital
Assuming the 90 days trading horizon Helios Fairfax Partners is expected to under-perform the First Capital. In addition to that, Helios Fairfax is 2.37 times more volatile than First Capital Real. It trades about -0.03 of its total potential returns per unit of risk. First Capital Real is currently generating about 0.05 per unit of volatility. If you would invest 1,778 in First Capital Real on September 1, 2024 and sell it today you would earn a total of 16.00 from holding First Capital Real or generate 0.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Helios Fairfax Partners vs. First Capital Real
Performance |
| Timeline |
| Helios Fairfax Partners |
| First Capital Real |
Helios Fairfax and First Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Helios Fairfax and First Capital
The main advantage of trading using opposite Helios Fairfax and First Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Helios Fairfax position performs unexpectedly, First Capital 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 First Capital will offset losses from the drop in First Capital's long position.| Helios Fairfax vs. Highwood Asset Management | Helios Fairfax vs. Hemisphere Energy | Helios Fairfax vs. AGF Management Limited | Helios Fairfax vs. Arbor Metals Corp |
| First Capital vs. Killam Apartment Real | First Capital vs. InterRent Real Estate | First Capital vs. Crombie Real Estate | First Capital vs. Allied Properties Real |
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 CEOs Directory module to screen CEOs from public companies around the world.
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