Correlation Between Scharf Global and The Fairholme
Can any of the company-specific risk be diversified away by investing in both Scharf Global and The Fairholme 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 Scharf Global and The Fairholme into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scharf Global Opportunity and The Fairholme Fund, you can compare the effects of market volatilities on Scharf Global and The Fairholme 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 Scharf Global with a short position of The Fairholme. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Global and The Fairholme.
Diversification Opportunities for Scharf Global and The Fairholme
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Scharf and The is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Global Opportunity and The Fairholme Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Fairholme and Scharf Global 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 Scharf Global Opportunity are associated (or correlated) with The Fairholme. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Fairholme has no effect on the direction of Scharf Global i.e., Scharf Global and The Fairholme go up and down completely randomly.
Pair Corralation between Scharf Global and The Fairholme
Assuming the 90 days horizon Scharf Global Opportunity is expected to generate 0.43 times more return on investment than The Fairholme. However, Scharf Global Opportunity is 2.34 times less risky than The Fairholme. It trades about 0.1 of its potential returns per unit of risk. The Fairholme Fund is currently generating about -0.01 per unit of risk. If you would invest 3,271 in Scharf Global Opportunity on September 5, 2024 and sell it today you would earn a total of 528.00 from holding Scharf Global Opportunity or generate 16.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scharf Global Opportunity vs. The Fairholme Fund
Performance |
| Timeline |
| Scharf Global Opportunity |
| The Fairholme |
Scharf Global and The Fairholme Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scharf Global and The Fairholme
The main advantage of trading using opposite Scharf Global and The Fairholme positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scharf Global position performs unexpectedly, The Fairholme 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 The Fairholme will offset losses from the drop in The Fairholme's long position.| Scharf Global vs. Small Cap Equity | Scharf Global vs. Sarofim Equity | Scharf Global vs. Us Vector Equity | Scharf Global vs. Scharf Fund Retail |
| The Fairholme vs. The Fairholme Focused | The Fairholme vs. Ladenburg Income Fundclass | The Fairholme vs. Fidelity Growth Pany | The Fairholme vs. Liberty All Star |
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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