Correlation Between Freedom Bank and Burnham Holdings
Can any of the company-specific risk be diversified away by investing in both Freedom Bank and Burnham Holdings 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 Freedom Bank and Burnham Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Freedom Bank of and Burnham Holdings PFD, you can compare the effects of market volatilities on Freedom Bank and Burnham Holdings 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 Freedom Bank with a short position of Burnham Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freedom Bank and Burnham Holdings.
Diversification Opportunities for Freedom Bank and Burnham Holdings
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Freedom and Burnham is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Bank of and Burnham Holdings PFD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burnham Holdings PFD and Freedom Bank 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 Freedom Bank of are associated (or correlated) with Burnham Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burnham Holdings PFD has no effect on the direction of Freedom Bank i.e., Freedom Bank and Burnham Holdings go up and down completely randomly.
Pair Corralation between Freedom Bank and Burnham Holdings
Given the investment horizon of 90 days Freedom Bank of is expected to generate 3.81 times more return on investment than Burnham Holdings. However, Freedom Bank is 3.81 times more volatile than Burnham Holdings PFD. It trades about 0.05 of its potential returns per unit of risk. Burnham Holdings PFD is currently generating about 0.09 per unit of risk. If you would invest 982.00 in Freedom Bank of on September 14, 2024 and sell it today you would earn a total of 105.00 from holding Freedom Bank of or generate 10.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 82.46% |
| Values | Daily Returns |
Freedom Bank of vs. Burnham Holdings PFD
Performance |
| Timeline |
| Freedom Bank |
| Burnham Holdings PFD |
Freedom Bank and Burnham Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freedom Bank and Burnham Holdings
The main advantage of trading using opposite Freedom Bank and Burnham Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freedom Bank position performs unexpectedly, Burnham Holdings 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 Burnham Holdings will offset losses from the drop in Burnham Holdings' long position.| Freedom Bank vs. National Capital Bank | Freedom Bank vs. Community Heritage Financial | Freedom Bank vs. Citizens Financial Corp | Freedom Bank vs. Bank of Idaho |
| Burnham Holdings vs. Artisan Partners Asset | Burnham Holdings vs. Univest Pennsylvania | Burnham Holdings vs. The Coca Cola | Burnham Holdings vs. Freedom Bank of |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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