Correlation Between Fairfax Financial and East Side
Can any of the company-specific risk be diversified away by investing in both Fairfax Financial and East Side 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 Fairfax Financial and East Side into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fairfax Financial Holdings and East Side Games, you can compare the effects of market volatilities on Fairfax Financial and East Side 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 Fairfax Financial with a short position of East Side. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fairfax Financial and East Side.
Diversification Opportunities for Fairfax Financial and East Side
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fairfax and East is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Fairfax Financial Holdings and East Side Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on East Side Games and Fairfax Financial 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 Fairfax Financial Holdings are associated (or correlated) with East Side. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of East Side Games has no effect on the direction of Fairfax Financial i.e., Fairfax Financial and East Side go up and down completely randomly.
Pair Corralation between Fairfax Financial and East Side
Assuming the 90 days trading horizon Fairfax Financial Holdings is expected to generate 0.18 times more return on investment than East Side. However, Fairfax Financial Holdings is 5.66 times less risky than East Side. It trades about -0.04 of its potential returns per unit of risk. East Side Games is currently generating about -0.09 per unit of risk. If you would invest 2,400 in Fairfax Financial Holdings on September 24, 2024 and sell it today you would lose (15.00) from holding Fairfax Financial Holdings or give up 0.62% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Fairfax Financial Holdings vs. East Side Games
Performance |
Timeline |
Fairfax Financial |
East Side Games |
Fairfax Financial and East Side Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fairfax Financial and East Side
The main advantage of trading using opposite Fairfax Financial and East Side positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fairfax Financial position performs unexpectedly, East Side 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 East Side will offset losses from the drop in East Side's long position.Fairfax Financial vs. Metalero Mining Corp | Fairfax Financial vs. Nova Leap Health | Fairfax Financial vs. Jamieson Wellness | Fairfax Financial vs. Plaza Retail REIT |
East Side vs. Sangoma Technologies Corp | East Side vs. Vitalhub Corp | East Side vs. Propel Holdings | East Side vs. D2L Inc |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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