Correlation Between Gatos Silver and Fairfax Fin
Can any of the company-specific risk be diversified away by investing in both Gatos Silver and Fairfax Fin 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 Gatos Silver and Fairfax Fin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gatos Silver and Fairfax Fin Hld, you can compare the effects of market volatilities on Gatos Silver and Fairfax Fin 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 Gatos Silver with a short position of Fairfax Fin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gatos Silver and Fairfax Fin.
Diversification Opportunities for Gatos Silver and Fairfax Fin
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gatos and Fairfax is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Gatos Silver and Fairfax Fin Hld in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fairfax Fin Hld and Gatos 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 Gatos Silver are associated (or correlated) with Fairfax Fin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fairfax Fin Hld has no effect on the direction of Gatos Silver i.e., Gatos Silver and Fairfax Fin go up and down completely randomly.
Pair Corralation between Gatos Silver and Fairfax Fin
Assuming the 90 days trading horizon Gatos Silver is expected to under-perform the Fairfax Fin. In addition to that, Gatos Silver is 4.96 times more volatile than Fairfax Fin Hld. It trades about -0.07 of its total potential returns per unit of risk. Fairfax Fin Hld is currently generating about 0.22 per unit of volatility. If you would invest 2,107 in Fairfax Fin Hld on September 25, 2024 and sell it today you would earn a total of 68.00 from holding Fairfax Fin Hld or generate 3.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Gatos Silver vs. Fairfax Fin Hld
Performance |
Timeline |
Gatos Silver |
Fairfax Fin Hld |
Gatos Silver and Fairfax Fin Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gatos Silver and Fairfax Fin
The main advantage of trading using opposite Gatos Silver and Fairfax Fin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gatos Silver position performs unexpectedly, Fairfax Fin 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 Fin will offset losses from the drop in Fairfax Fin's long position.Gatos Silver vs. SilverCrest Metals | Gatos Silver vs. Reyna Silver Corp | Gatos Silver vs. New Pacific Metals | Gatos Silver vs. GoGold Resources |
Fairfax Fin vs. Fairfax Financial Holdings | Fairfax Fin vs. Fairfax Financial Holdings | Fairfax Fin vs. Fairfax Financial Holdings | Fairfax Fin vs. Fairfax Financial Holdings |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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