Correlation Between Freedom Bank and Cgrowth Capital
Can any of the company-specific risk be diversified away by investing in both Freedom Bank and Cgrowth Capital 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 Cgrowth Capital 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 Cgrowth Capital, you can compare the effects of market volatilities on Freedom Bank and Cgrowth Capital 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 Cgrowth Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freedom Bank and Cgrowth Capital.
Diversification Opportunities for Freedom Bank and Cgrowth Capital
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Freedom and Cgrowth is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Bank of and Cgrowth Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cgrowth Capital 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 Cgrowth Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cgrowth Capital has no effect on the direction of Freedom Bank i.e., Freedom Bank and Cgrowth Capital go up and down completely randomly.
Pair Corralation between Freedom Bank and Cgrowth Capital
Given the investment horizon of 90 days Freedom Bank is expected to generate 46.55 times less return on investment than Cgrowth Capital. But when comparing it to its historical volatility, Freedom Bank of is 26.01 times less risky than Cgrowth Capital. It trades about 0.12 of its potential returns per unit of risk. Cgrowth Capital is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 0.20 in Cgrowth Capital on September 14, 2024 and sell it today you would earn a total of 0.14 from holding Cgrowth Capital or generate 70.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Freedom Bank of vs. Cgrowth Capital
Performance |
| Timeline |
| Freedom Bank |
| Cgrowth Capital |
Freedom Bank and Cgrowth Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freedom Bank and Cgrowth Capital
The main advantage of trading using opposite Freedom Bank and Cgrowth Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freedom Bank position performs unexpectedly, Cgrowth Capital 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 Cgrowth Capital will offset losses from the drop in Cgrowth Capital's 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 |
| Cgrowth Capital vs. Freedom Bank of | Cgrowth Capital vs. HUMANA INC | Cgrowth Capital vs. Barloworld Ltd ADR | Cgrowth Capital vs. Morningstar Unconstrained Allocation |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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