Correlation Between Helios Fairfax and Boat Rocker

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

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

Diversification Opportunities for Helios Fairfax and Boat Rocker

-0.43

Correlation Coefficient

Helios Fairfax  Boat Rocker

Very good diversification

The 3 months correlation between Helios and Boat is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Helios Fairfax Partners and Boat Rocker Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boat Rocker Media and Helios Fairfax 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 Helios Fairfax Partners are associated (or correlated) with Boat Rocker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boat Rocker Media has no effect on the direction of Helios Fairfax i.e., Helios Fairfax and Boat Rocker go up and down completely randomly.

Pair Corralation between Helios Fairfax and Boat Rocker

Assuming the 90 days trading horizon Helios Fairfax Partners is expected to generate 0.81 times more return on investment than Boat Rocker. However, Helios Fairfax Partners is 1.23 times less risky than Boat Rocker. It trades about 0.0 of its potential returns per unit of risk. Boat Rocker Media is currently generating about 0.0 per unit of risk. If you would invest  270.00  in Helios Fairfax Partners on December 2, 2024 and sell it today you would lose (30.00) from holding Helios Fairfax Partners or give up 11.11% of portfolio value over 90 days.

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

Helios Fairfax Partners  vs.  Boat Rocker Media

Helios Fairfax Partners

Risk-Adjusted Performance

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 somewhat strong basic indicators, Helios Fairfax is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Boat Rocker Media

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Boat Rocker Media are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Boat Rocker may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Helios Fairfax and Boat Rocker

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

The idea behind Helios Fairfax Partners and Boat Rocker Media 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.