Correlation Between Freedom Bank and Critical Metals
Can any of the company-specific risk be diversified away by investing in both Freedom Bank and Critical Metals 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 Critical Metals 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 Critical Metals Corp, you can compare the effects of market volatilities on Freedom Bank and Critical Metals 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 Critical Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freedom Bank and Critical Metals.
Diversification Opportunities for Freedom Bank and Critical Metals
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Freedom and Critical is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Bank of and Critical Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Critical Metals Corp 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 Critical Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Critical Metals Corp has no effect on the direction of Freedom Bank i.e., Freedom Bank and Critical Metals go up and down completely randomly.
Pair Corralation between Freedom Bank and Critical Metals
Given the investment horizon of 90 days Freedom Bank is expected to generate 5.96 times less return on investment than Critical Metals. But when comparing it to its historical volatility, Freedom Bank of is 11.79 times less risky than Critical Metals. It trades about 0.05 of its potential returns per unit of risk. Critical Metals Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,095 in Critical Metals Corp on September 14, 2024 and sell it today you would lose (460.00) from holding Critical Metals Corp or give up 42.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 82.16% |
| Values | Daily Returns |
Freedom Bank of vs. Critical Metals Corp
Performance |
| Timeline |
| Freedom Bank |
| Critical Metals Corp |
Freedom Bank and Critical Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freedom Bank and Critical Metals
The main advantage of trading using opposite Freedom Bank and Critical Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freedom Bank position performs unexpectedly, Critical Metals 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 Critical Metals will offset losses from the drop in Critical Metals' 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 |
| Critical Metals vs. Encore Capital Group | Critical Metals vs. Delek Logistics Partners | Critical Metals vs. Sun Country Airlines | Critical Metals 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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