Correlation Between FG Financial and Fairfax Financial
Can any of the company-specific risk be diversified away by investing in both FG Financial 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 FG Financial and Fairfax Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FG Financial Group and Fairfax Financial Holdings, you can compare the effects of market volatilities on FG Financial 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 FG Financial with a short position of Fairfax Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of FG Financial and Fairfax Financial.
Diversification Opportunities for FG Financial and Fairfax Financial
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PIH and Fairfax is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FG Financial 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 FG 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 FG Financial 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 FG Financial i.e., FG Financial and Fairfax Financial go up and down completely randomly.
Pair Corralation between FG Financial and Fairfax Financial
If you would invest 100,635 in Fairfax Financial Holdings on January 25, 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 |
FG Financial Group vs. Fairfax Financial Holdings
Performance |
| Timeline |
| FG Financial Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Fairfax Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
FG Financial and Fairfax Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FG Financial and Fairfax Financial
The main advantage of trading using opposite FG Financial and Fairfax Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FG Financial 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.| FG Financial vs. Hillman Solutions Corp | FG Financial vs. Newell Brands | FG Financial vs. Church Dwight | FG Financial vs. Fidus Investment Corp |
| 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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