Correlation Between XXIX Metal and Fairfax Fin

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

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

Diversification Opportunities for XXIX Metal and Fairfax Fin

-0.45

Correlation Coefficient

XXIX Metal  Fairfax Fin

Very good diversification

The 3 months correlation between XXIX and Fairfax is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding XXIX Metal Corp 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 XXIX Metal 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 XXIX Metal Corp 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 XXIX Metal i.e., XXIX Metal and Fairfax Fin go up and down completely randomly.

Pair Corralation between XXIX Metal and Fairfax Fin

Assuming the 90 days trading horizon XXIX Metal Corp is expected to generate 74.27 times more return on investment than Fairfax Fin. However, XXIX Metal is 74.27 times more volatile than Fairfax Fin Hld. It trades about 0.02 of its potential returns per unit of risk. Fairfax Fin Hld is currently generating about 0.24 per unit of risk. If you would invest  12.00  in XXIX Metal Corp on October 22, 2024 and sell it today you would earn a total of  0.00  from holding XXIX Metal Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	33.33%
Values	Daily Returns

XXIX Metal Corp  vs.  Fairfax Fin Hld

XXIX Metal Corp

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days XXIX Metal Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable forward indicators, XXIX Metal 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

0 of 100

Solid

Over the last 90 days Fairfax Fin Hld has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat abnormal technical indicators, Fairfax Fin sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with XXIX Metal and Fairfax Fin

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

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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.