Correlation Between Lycos Energy and Fairfax Financial
Can any of the company-specific risk be diversified away by investing in both Lycos Energy 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 Lycos Energy and Fairfax Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lycos Energy and Fairfax Financial Holdings, you can compare the effects of market volatilities on Lycos Energy 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 Lycos Energy with a short position of Fairfax Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lycos Energy and Fairfax Financial.
Diversification Opportunities for Lycos Energy and Fairfax Financial
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lycos and Fairfax is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Lycos Energy and Fairfax Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fairfax Financial and Lycos Energy 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 Lycos Energy 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 Lycos Energy i.e., Lycos Energy and Fairfax Financial go up and down completely randomly.
Pair Corralation between Lycos Energy and Fairfax Financial
Assuming the 90 days horizon Lycos Energy is expected to under-perform the Fairfax Financial. In addition to that, Lycos Energy is 1.89 times more volatile than Fairfax Financial Holdings. It trades about -0.09 of its total potential returns per unit of risk. Fairfax Financial Holdings is currently generating about 0.21 per unit of volatility. If you would invest 197,037 in Fairfax Financial Holdings on December 1, 2024 and sell it today you would earn a total of 10,966 from holding Fairfax Financial Holdings or generate 5.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lycos Energy vs. Fairfax Financial Holdings
Performance |
| Timeline |
| Lycos Energy |
| Fairfax Financial |
Lycos Energy and Fairfax Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lycos Energy and Fairfax Financial
The main advantage of trading using opposite Lycos Energy and Fairfax Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lycos Energy 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.| Lycos Energy vs. Western Copper and | Lycos Energy vs. HPQ Silicon Resources | Lycos Energy vs. Primaris Retail RE | Lycos Energy vs. TGS Esports |
| Fairfax Financial vs. Intact Financial | Fairfax Financial vs. iA Financial | Fairfax Financial vs. TMX Group Limited | Fairfax Financial vs. Onex 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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