Correlation Between Summa Silver and Fairfax Financial
Can any of the company-specific risk be diversified away by investing in both Summa Silver 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 Summa Silver and Fairfax Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summa Silver Corp and Fairfax Financial Holdings, you can compare the effects of market volatilities on Summa Silver 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 Summa Silver with a short position of Fairfax Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summa Silver and Fairfax Financial.
Diversification Opportunities for Summa Silver and Fairfax Financial
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Summa and Fairfax is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Summa Silver 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 Summa Silver 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 Summa Silver 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 Summa Silver i.e., Summa Silver and Fairfax Financial go up and down completely randomly.
Pair Corralation between Summa Silver and Fairfax Financial
Assuming the 90 days trading horizon Summa Silver Corp is expected to generate 14.46 times more return on investment than Fairfax Financial. However, Summa Silver is 14.46 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 0.25 per unit of risk. If you would invest 28.00 in Summa Silver Corp on September 13, 2024 and sell it today you would earn a total of 0.00 from holding Summa Silver Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summa Silver Corp vs. Fairfax Financial Holdings
Performance |
| Timeline |
| Summa Silver Corp |
| Fairfax Financial |
Summa Silver and Fairfax Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summa Silver and Fairfax Financial
The main advantage of trading using opposite Summa Silver and Fairfax Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summa Silver 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.| Summa Silver vs. Outcrop Gold Corp | Summa Silver vs. Strikepoint Gold | Summa Silver vs. Defiance Silver Corp | Summa Silver vs. Eskay Mining Corp |
| Fairfax Financial vs. Hemisphere Energy | Fairfax Financial vs. Aya Gold Silver | Fairfax Financial vs. Summa Silver Corp | Fairfax Financial vs. Canlan Ice Sports |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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