Correlation Between Clairvest and Helios Fairfax

Can any of the company-specific risk be diversified away by investing in both Clairvest and Helios Fairfax 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 Clairvest and Helios Fairfax into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Clairvest Group and Helios Fairfax Partners, you can compare the effects of market volatilities on Clairvest and Helios Fairfax 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 Clairvest with a short position of Helios Fairfax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clairvest and Helios Fairfax.

Diversification Opportunities for Clairvest and Helios Fairfax

-0.03

Correlation Coefficient

Clairvest  Helios Fairfax

Good diversification

The 3 months correlation between Clairvest and Helios is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Clairvest Group and Helios Fairfax Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helios Fairfax Partners and Clairvest 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 Clairvest Group are associated (or correlated) with Helios Fairfax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helios Fairfax Partners has no effect on the direction of Clairvest i.e., Clairvest and Helios Fairfax go up and down completely randomly.

Pair Corralation between Clairvest and Helios Fairfax

Assuming the 90 days trading horizon Clairvest Group is expected to generate 0.26 times more return on investment than Helios Fairfax. However, Clairvest Group is 3.78 times less risky than Helios Fairfax. It trades about 0.01 of its potential returns per unit of risk. Helios Fairfax Partners is currently generating about -0.07 per unit of risk. If you would invest  6,970  in Clairvest Group on October 22, 2024 and sell it today you would earn a total of  30.00  from holding Clairvest Group or generate 0.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Clairvest Group  vs.  Helios Fairfax Partners

Clairvest Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clairvest Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Clairvest is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Helios Fairfax Partners

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Helios Fairfax Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Clairvest and Helios Fairfax

The main advantage of trading using opposite Clairvest and Helios Fairfax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clairvest position performs unexpectedly, Helios Fairfax 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 Helios Fairfax will offset losses from the drop in Helios Fairfax's long position.

The idea behind Clairvest Group and Helios Fairfax Partners pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..