Correlation Between EMC Insurance and Fairfax Financial
Can any of the company-specific risk be diversified away by investing in both EMC Insurance and Fairfax Financial 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 EMC Insurance and Fairfax Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EMC Insurance Group and Fairfax Financial Holdings, you can compare the effects of market volatilities on EMC Insurance and Fairfax Financial 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 EMC Insurance with a short position of Fairfax Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMC Insurance and Fairfax Financial.
Diversification Opportunities for EMC Insurance and Fairfax Financial
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EMC and Fairfax is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EMC Insurance Group and Fairfax Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fairfax Financial and EMC Insurance 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 EMC Insurance Group are associated (or correlated) with Fairfax Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fairfax Financial has no effect on the direction of EMC Insurance i.e., EMC Insurance and Fairfax Financial go up and down completely randomly.
Pair Corralation between EMC Insurance and Fairfax Financial
If you would invest 100,635 in Fairfax Financial Holdings on January 19, 2024 and sell it today you would earn a total of 0.00 from holding Fairfax Financial Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
EMC Insurance Group vs. Fairfax Financial Holdings
Performance |
| Timeline |
| EMC Insurance Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Fairfax Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
EMC Insurance and Fairfax Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMC Insurance and Fairfax Financial
The main advantage of trading using opposite EMC Insurance and Fairfax Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMC Insurance position performs unexpectedly, Fairfax Financial 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 Financial will offset losses from the drop in Fairfax Financial's long position.| EMC Insurance vs. BJs Restaurants | EMC Insurance vs. Texas Roadhouse | EMC Insurance vs. JBG SMITH Properties | EMC Insurance vs. Hudson Pacific Properties |
| Fairfax Financial vs. RLI Corp | Fairfax Financial vs. Chubb | Fairfax Financial vs. Progressive Corp | Fairfax Financial vs. White Mountains Insurance |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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