Correlation Between Genscript Biotech and Fairfax Financial

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

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

Diversification Opportunities for Genscript Biotech and Fairfax Financial

0.73

Correlation Coefficient

Genscript Biotech  Fairfax Financial

Poor diversification

The 3 months correlation between Genscript and Fairfax is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Genscript Biotech and Fairfax Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fairfax Financial and Genscript Biotech 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 Genscript Biotech 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 Genscript Biotech i.e., Genscript Biotech and Fairfax Financial go up and down completely randomly.

Pair Corralation between Genscript Biotech and Fairfax Financial

Assuming the 90 days horizon Genscript Biotech is expected to generate 3.23 times more return on investment than Fairfax Financial. However, Genscript Biotech is 3.23 times more volatile than Fairfax Financial Holdings. It trades about 0.18 of its potential returns per unit of risk. Fairfax Financial Holdings is currently generating about 0.21 per unit of risk. If you would invest  119.00  in Genscript Biotech on April 20, 2025 and sell it today you would earn a total of  62.00  from holding Genscript Biotech or generate 52.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Genscript Biotech  vs.  Fairfax Financial Holdings

Genscript Biotech

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Genscript Biotech are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Genscript Biotech reported solid returns over the last few months and may actually be approaching a breakup point.

Fairfax Financial

Risk-Adjusted Performance

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 nearly fragile basic indicators, Fairfax Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Genscript Biotech and Fairfax Financial

The main advantage of trading using opposite Genscript Biotech and Fairfax Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genscript Biotech 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 Genscript Biotech 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.