Correlation Between Chemtrade Logistics and Fairfax Financial
Can any of the company-specific risk be diversified away by investing in both Chemtrade Logistics 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 Chemtrade Logistics and Fairfax Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chemtrade Logistics Income and Fairfax Financial Holdings, you can compare the effects of market volatilities on Chemtrade Logistics 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 Chemtrade Logistics with a short position of Fairfax Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemtrade Logistics and Fairfax Financial.
Diversification Opportunities for Chemtrade Logistics and Fairfax Financial
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chemtrade and Fairfax is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Chemtrade Logistics Income and Fairfax Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fairfax Financial and Chemtrade Logistics 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 Chemtrade Logistics Income 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 Chemtrade Logistics i.e., Chemtrade Logistics and Fairfax Financial go up and down completely randomly.
Pair Corralation between Chemtrade Logistics and Fairfax Financial
Assuming the 90 days trading horizon Chemtrade Logistics is expected to generate 1.5 times less return on investment than Fairfax Financial. In addition to that, Chemtrade Logistics is 1.43 times more volatile than Fairfax Financial Holdings. It trades about 0.04 of its total potential returns per unit of risk. Fairfax Financial Holdings is currently generating about 0.1 per unit of volatility. If you would invest 1,419 in Fairfax Financial Holdings on September 26, 2024 and sell it today you would earn a total of 876.00 from holding Fairfax Financial Holdings or generate 61.73% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Chemtrade Logistics Income vs. Fairfax Financial Holdings
Performance |
Timeline |
Chemtrade Logistics |
Fairfax Financial |
Chemtrade Logistics and Fairfax Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chemtrade Logistics and Fairfax Financial
The main advantage of trading using opposite Chemtrade Logistics and Fairfax Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemtrade Logistics 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.Chemtrade Logistics vs. Finning International | Chemtrade Logistics vs. Keyera Corp | Chemtrade Logistics vs. Linamar | Chemtrade Logistics vs. Russel Metals |
Fairfax Financial vs. Canso Select Opportunities | Fairfax Financial vs. Ocumetics Technology Corp | Fairfax Financial vs. Chemtrade Logistics Income | Fairfax Financial vs. A W FOOD |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |