Correlation Between Fairfax Financial and DOGS
Can any of the company-specific risk be diversified away by investing in both Fairfax Financial and DOGS 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 Fairfax Financial and DOGS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fairfax Financial Holdings and DOGS, you can compare the effects of market volatilities on Fairfax Financial and DOGS 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 Fairfax Financial with a short position of DOGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fairfax Financial and DOGS.
Diversification Opportunities for Fairfax Financial and DOGS
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fairfax and DOGS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fairfax Financial Holdings and DOGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DOGS and Fairfax Financial 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 Fairfax Financial Holdings are associated (or correlated) with DOGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DOGS has no effect on the direction of Fairfax Financial i.e., Fairfax Financial and DOGS go up and down completely randomly.
Pair Corralation between Fairfax Financial and DOGS
If you would invest (100.00) in DOGS on January 25, 2024 and sell it today you would earn a total of 100.00 from holding DOGS or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Fairfax Financial Holdings vs. DOGS
Performance |
| Timeline |
| Fairfax Financial |
| DOGS |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Fairfax Financial and DOGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fairfax Financial and DOGS
The main advantage of trading using opposite Fairfax Financial and DOGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fairfax Financial position performs unexpectedly, DOGS 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 DOGS will offset losses from the drop in DOGS's long position.| Fairfax Financial vs. Element Fleet Management | Fairfax Financial vs. Martinrea International | Fairfax Financial vs. Mullen Group |
| DOGS vs. Goldman Sachs ActiveBeta | DOGS vs. Hartford Multifactor Equity | DOGS vs. Hartford Multifactor Emerging | DOGS vs. John Hancock Multifactor |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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