Correlation Between Helios Fairfax and Corus Entertainment

Can any of the company-specific risk be diversified away by investing in both Helios Fairfax and Corus Entertainment 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 Corus Entertainment 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 Corus Entertainment, you can compare the effects of market volatilities on Helios Fairfax and Corus Entertainment 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 Corus Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Helios Fairfax and Corus Entertainment.

Diversification Opportunities for Helios Fairfax and Corus Entertainment

-0.1

Correlation Coefficient

Helios Fairfax  Corus Entertainment

Good diversification

The 3 months correlation between Helios and Corus is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Helios Fairfax Partners and Corus Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corus Entertainment 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 Corus Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corus Entertainment has no effect on the direction of Helios Fairfax i.e., Helios Fairfax and Corus Entertainment go up and down completely randomly.

Pair Corralation between Helios Fairfax and Corus Entertainment

Assuming the 90 days trading horizon Helios Fairfax Partners is expected to generate 0.67 times more return on investment than Corus Entertainment. However, Helios Fairfax Partners is 1.49 times less risky than Corus Entertainment. It trades about -0.02 of its potential returns per unit of risk. Corus Entertainment is currently generating about -0.02 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	Insignificant
Accuracy	100.0%
Values	Daily Returns

Helios Fairfax Partners  vs.  Corus Entertainment

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.

Corus Entertainment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Corus Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Helios Fairfax and Corus Entertainment

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

The idea behind Helios Fairfax Partners and Corus Entertainment 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.