Correlation Between Freedom Bank and Stagwell
Can any of the company-specific risk be diversified away by investing in both Freedom Bank and Stagwell 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 Stagwell 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 Stagwell, you can compare the effects of market volatilities on Freedom Bank and Stagwell 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 Stagwell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freedom Bank and Stagwell.
Diversification Opportunities for Freedom Bank and Stagwell
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Freedom and Stagwell is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Bank of and Stagwell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stagwell 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 Stagwell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stagwell has no effect on the direction of Freedom Bank i.e., Freedom Bank and Stagwell go up and down completely randomly.
Pair Corralation between Freedom Bank and Stagwell
Given the investment horizon of 90 days Freedom Bank is expected to generate 25.28 times less return on investment than Stagwell. But when comparing it to its historical volatility, Freedom Bank of is 4.1 times less risky than Stagwell. It trades about 0.07 of its potential returns per unit of risk. Stagwell is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 635.00 in Stagwell on August 30, 2024 and sell it today you would earn a total of 174.00 from holding Stagwell or generate 27.4% 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. Stagwell
Performance |
| Timeline |
| Freedom Bank |
| Stagwell |
Freedom Bank and Stagwell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freedom Bank and Stagwell
The main advantage of trading using opposite Freedom Bank and Stagwell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freedom Bank position performs unexpectedly, Stagwell 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 Stagwell will offset losses from the drop in Stagwell's long position.| Freedom Bank vs. Washington Business Bank | Freedom Bank vs. National Capital Bank | Freedom Bank vs. Community Heritage Financial | Freedom Bank vs. Citizens Financial Corp |
| Stagwell vs. Innovid Corp | Stagwell vs. Interpublic Group of | Stagwell vs. Cimpress NV | Stagwell vs. Criteo Sa |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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