Correlation Between Sun Peak and Fairfax Financial
Can any of the company-specific risk be diversified away by investing in both Sun Peak 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 Sun Peak and Fairfax Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sun Peak Metals and Fairfax Financial Holdings, you can compare the effects of market volatilities on Sun Peak 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 Sun Peak with a short position of Fairfax Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Peak and Fairfax Financial.
Diversification Opportunities for Sun Peak and Fairfax Financial
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sun and Fairfax is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Sun Peak Metals and Fairfax Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fairfax Financial and Sun Peak 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 Sun Peak Metals 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 Sun Peak i.e., Sun Peak and Fairfax Financial go up and down completely randomly.
Pair Corralation between Sun Peak and Fairfax Financial
Assuming the 90 days trading horizon Sun Peak Metals is expected to generate 6.06 times more return on investment than Fairfax Financial. However, Sun Peak is 6.06 times more volatile than Fairfax Financial Holdings. It trades about 0.03 of its potential returns per unit of risk. Fairfax Financial Holdings is currently generating about 0.1 per unit of risk. If you would invest 30.00 in Sun Peak Metals on October 14, 2024 and sell it today you would earn a total of 0.00 from holding Sun Peak Metals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Peak Metals vs. Fairfax Financial Holdings
Performance |
| Timeline |
| Sun Peak Metals |
| Fairfax Financial |
Sun Peak and Fairfax Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Peak and Fairfax Financial
The main advantage of trading using opposite Sun Peak and Fairfax Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Peak 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.| Sun Peak vs. High Liner Foods | Sun Peak vs. Atrium Mortgage Investment | Sun Peak vs. Canadian General Investments | Sun Peak vs. Lion One Metals |
| Fairfax Financial vs. Monument Mining Limited | Fairfax Financial vs. Lion One Metals | Fairfax Financial vs. Precious Metals And | Fairfax Financial vs. Sun Peak Metals |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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