Correlation Between Aimfinity Investment and Freedom Holding
Can any of the company-specific risk be diversified away by investing in both Aimfinity Investment and Freedom Holding 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 Aimfinity Investment and Freedom Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aimfinity Investment I and Freedom Holding Corp, you can compare the effects of market volatilities on Aimfinity Investment and Freedom Holding 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 Aimfinity Investment with a short position of Freedom Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aimfinity Investment and Freedom Holding.
Diversification Opportunities for Aimfinity Investment and Freedom Holding
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aimfinity and Freedom is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Aimfinity Investment I and Freedom Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freedom Holding Corp and Aimfinity Investment 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 Aimfinity Investment I are associated (or correlated) with Freedom Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freedom Holding Corp has no effect on the direction of Aimfinity Investment i.e., Aimfinity Investment and Freedom Holding go up and down completely randomly.
Pair Corralation between Aimfinity Investment and Freedom Holding
Assuming the 90 days horizon Aimfinity Investment is expected to generate 4.15 times less return on investment than Freedom Holding. But when comparing it to its historical volatility, Aimfinity Investment I is 2.26 times less risky than Freedom Holding. It trades about 0.04 of its potential returns per unit of risk. Freedom Holding Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 6,030 in Freedom Holding Corp on September 5, 2024 and sell it today you would earn a total of 5,927 from holding Freedom Holding Corp or generate 98.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aimfinity Investment I vs. Freedom Holding Corp
Performance |
| Timeline |
| Aimfinity Investment |
| Freedom Holding Corp |
Aimfinity Investment and Freedom Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aimfinity Investment and Freedom Holding
The main advantage of trading using opposite Aimfinity Investment and Freedom Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aimfinity Investment position performs unexpectedly, Freedom Holding 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 Freedom Holding will offset losses from the drop in Freedom Holding's long position.| Aimfinity Investment vs. Freedom Holding Corp | Aimfinity Investment vs. Maanshan Iron Steel | Aimfinity Investment vs. Insteel Industries | Aimfinity Investment vs. Nomura Holdings ADR |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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