Correlation Between Fairfax Financial and Voyageur Pharmaceuticals

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Fairfax Financial and Voyageur Pharmaceuticals 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 Voyageur Pharmaceuticals 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 Voyageur Pharmaceuticals, you can compare the effects of market volatilities on Fairfax Financial and Voyageur Pharmaceuticals 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 Voyageur Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fairfax Financial and Voyageur Pharmaceuticals.

Diversification Opportunities for Fairfax Financial and Voyageur Pharmaceuticals

-0.68
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Fairfax and Voyageur is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Fairfax Financial Holdings and Voyageur Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voyageur Pharmaceuticals 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 Voyageur Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voyageur Pharmaceuticals has no effect on the direction of Fairfax Financial i.e., Fairfax Financial and Voyageur Pharmaceuticals go up and down completely randomly.

Pair Corralation between Fairfax Financial and Voyageur Pharmaceuticals

Assuming the 90 days trading horizon Fairfax Financial Holdings is expected to generate 0.03 times more return on investment than Voyageur Pharmaceuticals. However, Fairfax Financial Holdings is 29.98 times less risky than Voyageur Pharmaceuticals. It trades about 0.43 of its potential returns per unit of risk. Voyageur Pharmaceuticals is currently generating about -0.07 per unit of risk. If you would invest  2,035  in Fairfax Financial Holdings on January 31, 2024 and sell it today you would earn a total of  64.00  from holding Fairfax Financial Holdings or generate 3.14% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Fairfax Financial Holdings  vs.  Voyageur Pharmaceuticals

 Performance 
       Timeline  
Fairfax Financial 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Fairfax Financial Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Fairfax Financial may actually be approaching a critical reversion point that can send shares even higher in May 2024.
Voyageur Pharmaceuticals 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Voyageur Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in May 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Fairfax Financial and Voyageur Pharmaceuticals Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Fairfax Financial and Voyageur Pharmaceuticals

The main advantage of trading using opposite Fairfax Financial and Voyageur Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fairfax Financial position performs unexpectedly, Voyageur Pharmaceuticals 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 Voyageur Pharmaceuticals will offset losses from the drop in Voyageur Pharmaceuticals' long position.
The idea behind Fairfax Financial Holdings and Voyageur Pharmaceuticals 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.
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

Other Complementary Tools

My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Commodity Channel
Use Commodity Channel Index to analyze current equity momentum
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Analyst Advice
Analyst recommendations and target price estimates broken down by several categories
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
CEOs Directory
Screen CEOs from public companies around the world