Correlation Between ISign Media and Fairfax Financial
Can any of the company-specific risk be diversified away by investing in both ISign Media 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 ISign Media and Fairfax Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iSign Media Solutions and Fairfax Financial Holdings, you can compare the effects of market volatilities on ISign Media 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 ISign Media with a short position of Fairfax Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of ISign Media and Fairfax Financial.
Diversification Opportunities for ISign Media and Fairfax Financial
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between ISign and Fairfax is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding iSign Media Solutions and Fairfax Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fairfax Financial and ISign Media 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 iSign Media Solutions 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 ISign Media i.e., ISign Media and Fairfax Financial go up and down completely randomly.
Pair Corralation between ISign Media and Fairfax Financial
Assuming the 90 days horizon ISign Media is expected to generate 1.63 times less return on investment than Fairfax Financial. But when comparing it to its historical volatility, iSign Media Solutions is 1.18 times less risky than Fairfax Financial. It trades about 0.08 of its potential returns per unit of risk. Fairfax Financial Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,121 in Fairfax Financial Holdings on September 27, 2024 and sell it today you would earn a total of 244.00 from holding Fairfax Financial Holdings or generate 11.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.41% |
Values | Daily Returns |
iSign Media Solutions vs. Fairfax Financial Holdings
Performance |
Timeline |
iSign Media Solutions |
Fairfax Financial |
ISign Media and Fairfax Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ISign Media and Fairfax Financial
The main advantage of trading using opposite ISign Media and Fairfax Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ISign Media 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.ISign Media vs. Avante Logixx | ||
ISign Media vs. NamSys Inc | ||
ISign Media vs. Redishred Capital Corp | ||
ISign Media vs. Biosyent |
Fairfax Financial vs. Information Services | ||
Fairfax Financial vs. Guru Organic Energy | ||
Fairfax Financial vs. Environmental Waste International | ||
Fairfax Financial vs. Tree Island Steel |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |