Correlation Between Quorum Information and Fairfax Fin

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

By analyzing existing cross correlation between Quorum Information Technologies and Fairfax Fin Hld, you can compare the effects of market volatilities on Quorum Information 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 Quorum Information with a short position of Fairfax Fin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quorum Information and Fairfax Fin.

Diversification Opportunities for Quorum Information and Fairfax Fin

0.08

Correlation Coefficient

Quorum Information  Fairfax Fin

Significant diversification

The 3 months correlation between Quorum and Fairfax is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Quorum Information Technologie 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 Quorum Information 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 Quorum Information Technologies 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 Quorum Information i.e., Quorum Information and Fairfax Fin go up and down completely randomly.

Pair Corralation between Quorum Information and Fairfax Fin

Assuming the 90 days horizon Quorum Information is expected to generate 2.36 times less return on investment than Fairfax Fin. In addition to that, Quorum Information is 2.04 times more volatile than Fairfax Fin Hld. It trades about 0.02 of its total potential returns per unit of risk. Fairfax Fin Hld is currently generating about 0.09 per unit of volatility. If you would invest  2,183  in Fairfax Fin Hld on December 30, 2024 and sell it today you would earn a total of  170.00  from holding Fairfax Fin Hld or generate 7.79% return on investment over 90 days.

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

Quorum Information Technologie  vs.  Fairfax Fin Hld

Quorum Information

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Quorum Information Technologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Quorum Information is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Fairfax Fin Hld

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fairfax Fin Hld are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating technical indicators, Fairfax Fin may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Quorum Information and Fairfax Fin

The main advantage of trading using opposite Quorum Information and Fairfax Fin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quorum Information 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.

The idea behind Quorum Information Technologies and Fairfax Fin Hld 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.