Correlation Between Questor Technology and Fairfax Financial

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

By analyzing existing cross correlation between Questor Technology and Fairfax Financial Holdings, you can compare the effects of market volatilities on Questor Technology 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 Questor Technology with a short position of Fairfax Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Questor Technology and Fairfax Financial.

Diversification Opportunities for Questor Technology and Fairfax Financial

-0.56

Correlation Coefficient

Questor Technology  Fairfax Financial

Excellent diversification

The 3 months correlation between Questor and Fairfax is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Questor Technology and Fairfax Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fairfax Financial and Questor Technology 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 Questor Technology 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 Questor Technology i.e., Questor Technology and Fairfax Financial go up and down completely randomly.

Pair Corralation between Questor Technology and Fairfax Financial

Assuming the 90 days horizon Questor Technology is expected to under-perform the Fairfax Financial. In addition to that, Questor Technology is 2.56 times more volatile than Fairfax Financial Holdings. It trades about -0.03 of its total potential returns per unit of risk. Fairfax Financial Holdings is currently generating about 0.2 per unit of volatility. If you would invest  1,811  in Fairfax Financial Holdings on September 27, 2024 and sell it today you would earn a total of  389.00  from holding Fairfax Financial Holdings or generate 21.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Questor Technology  vs.  Fairfax Financial Holdings

Questor Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Questor Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Fairfax Financial

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fairfax Financial Holdings are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating technical indicators, Fairfax Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Questor Technology and Fairfax Financial

The main advantage of trading using opposite Questor Technology and Fairfax Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Questor Technology 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.

The idea behind Questor Technology and Fairfax Financial Holdings 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.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.