Correlation Between Millbank Mining and Fairfax Financial
Can any of the company-specific risk be diversified away by investing in both Millbank Mining 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 Millbank Mining and Fairfax Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Millbank Mining Corp and Fairfax Financial Holdings, you can compare the effects of market volatilities on Millbank Mining 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 Millbank Mining with a short position of Fairfax Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Millbank Mining and Fairfax Financial.
Diversification Opportunities for Millbank Mining and Fairfax Financial
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Millbank and Fairfax is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Millbank Mining 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 Millbank Mining 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 Millbank Mining 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 Millbank Mining i.e., Millbank Mining and Fairfax Financial go up and down completely randomly.
Pair Corralation between Millbank Mining and Fairfax Financial
Assuming the 90 days trading horizon Millbank Mining Corp is expected to under-perform the Fairfax Financial. In addition to that, Millbank Mining is 17.77 times more volatile than Fairfax Financial Holdings. It trades about -0.1 of its total potential returns per unit of risk. Fairfax Financial Holdings is currently generating about 0.11 per unit of volatility. If you would invest 2,474 in Fairfax Financial Holdings on September 20, 2024 and sell it today you would earn a total of 11.00 from holding Fairfax Financial Holdings or generate 0.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Millbank Mining Corp vs. Fairfax Financial Holdings
Performance |
| Timeline |
| Millbank Mining Corp |
| Fairfax Financial |
Millbank Mining and Fairfax Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Millbank Mining and Fairfax Financial
The main advantage of trading using opposite Millbank Mining and Fairfax Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Millbank Mining 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.| Millbank Mining vs. Maple Peak Investments | Millbank Mining vs. Diversified Royalty Corp | Millbank Mining vs. Data Communications Management | Millbank Mining vs. Postmedia Network Canada |
| Fairfax Financial vs. Lion One Metals | Fairfax Financial vs. Precious Metals And | Fairfax Financial vs. Enerev5 Metals | Fairfax Financial vs. Millbank Mining 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |