Correlation Between Helios Fairfax and Transcontinental

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

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

Diversification Opportunities for Helios Fairfax and Transcontinental

-0.48

Correlation Coefficient

Helios Fairfax  Transcontinental

Very good diversification

The 3 months correlation between Helios and Transcontinental is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Helios Fairfax Partners and Transcontinental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transcontinental and Helios Fairfax 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 Helios Fairfax Partners are associated (or correlated) with Transcontinental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transcontinental has no effect on the direction of Helios Fairfax i.e., Helios Fairfax and Transcontinental go up and down completely randomly.

Pair Corralation between Helios Fairfax and Transcontinental

Assuming the 90 days trading horizon Helios Fairfax Partners is expected to under-perform the Transcontinental. In addition to that, Helios Fairfax is 2.55 times more volatile than Transcontinental. It trades about -0.02 of its total potential returns per unit of risk. Transcontinental is currently generating about 0.18 per unit of volatility. If you would invest  1,757  in Transcontinental on April 22, 2025 and sell it today you would earn a total of  250.00  from holding Transcontinental or generate 14.23% return on investment over 90 days.

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

Helios Fairfax Partners  vs.  Transcontinental

Helios Fairfax Partners

Risk-Adjusted Performance

Very Weak

Over the last 90 days Helios Fairfax Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Helios Fairfax is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Transcontinental

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Transcontinental are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Transcontinental unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Helios Fairfax and Transcontinental

The main advantage of trading using opposite Helios Fairfax and Transcontinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Helios Fairfax position performs unexpectedly, Transcontinental 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 Transcontinental will offset losses from the drop in Transcontinental's long position.

The idea behind Helios Fairfax Partners and Transcontinental 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.