Correlation Between Leveljump Healthcare and Fairfax Financial
Can any of the company-specific risk be diversified away by investing in both Leveljump Healthcare 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 Leveljump Healthcare and Fairfax Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leveljump Healthcare Corp and Fairfax Financial Holdings, you can compare the effects of market volatilities on Leveljump Healthcare 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 Leveljump Healthcare with a short position of Fairfax Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leveljump Healthcare and Fairfax Financial.
Diversification Opportunities for Leveljump Healthcare and Fairfax Financial
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Leveljump and Fairfax is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Leveljump Healthcare 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 Leveljump Healthcare 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 Leveljump Healthcare 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 Leveljump Healthcare i.e., Leveljump Healthcare and Fairfax Financial go up and down completely randomly.
Pair Corralation between Leveljump Healthcare and Fairfax Financial
Assuming the 90 days trading horizon Leveljump Healthcare Corp is expected to generate 5.82 times more return on investment than Fairfax Financial. However, Leveljump Healthcare is 5.82 times more volatile than Fairfax Financial Holdings. It trades about 0.02 of its potential returns per unit of risk. Fairfax Financial Holdings is currently generating about 0.09 per unit of risk. If you would invest 6.50 in Leveljump Healthcare Corp on October 14, 2024 and sell it today you would lose (1.50) from holding Leveljump Healthcare Corp or give up 23.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leveljump Healthcare Corp vs. Fairfax Financial Holdings
Performance |
| Timeline |
| Leveljump Healthcare Corp |
| Fairfax Financial |
Leveljump Healthcare and Fairfax Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leveljump Healthcare and Fairfax Financial
The main advantage of trading using opposite Leveljump Healthcare and Fairfax Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leveljump Healthcare 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.| Leveljump Healthcare vs. BluMetric Environmental | Leveljump Healthcare vs. Reliq Health Technologies | Leveljump Healthcare vs. Nova Leap Health | Leveljump Healthcare vs. Champion Iron |
| Fairfax Financial vs. Andlauer Healthcare Gr | Fairfax Financial vs. Leveljump Healthcare Corp | Fairfax Financial vs. HPQ Silicon Resources | Fairfax Financial vs. Bausch Health Companies |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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