Correlation Between Helios Fairfax and Partners Value

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

Diversification Opportunities for Helios Fairfax and Partners Value

-0.14

Correlation Coefficient

Helios Fairfax  Partners Value

Good diversification

The 3 months correlation between Helios and Partners is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Helios Fairfax Partners and Partners Value Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Partners Value Inves 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 Partners Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Partners Value Inves has no effect on the direction of Helios Fairfax i.e., Helios Fairfax and Partners Value go up and down completely randomly.

Pair Corralation between Helios Fairfax and Partners Value

Assuming the 90 days trading horizon Helios Fairfax Partners is expected to under-perform the Partners Value. In addition to that, Helios Fairfax is 2.26 times more volatile than Partners Value Investments. It trades about -0.04 of its total potential returns per unit of risk. Partners Value Investments is currently generating about 0.06 per unit of volatility. If you would invest  14,000  in Partners Value Investments on November 29, 2024 and sell it today you would earn a total of  900.00  from holding Partners Value Investments or generate 6.43% return on investment over 90 days.

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

Helios Fairfax Partners  vs.  Partners Value Investments

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 latest unfluctuating performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Partners Value Inves

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Partners Value Investments are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal basic indicators, Partners Value may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Helios Fairfax and Partners Value

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

The idea behind Helios Fairfax Partners and Partners Value Investments 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.