Correlation Between Freedom Holding and Abcellera Biologics
Can any of the company-specific risk be diversified away by investing in both Freedom Holding and Abcellera Biologics 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 Holding and Abcellera Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Freedom Holding Corp and Abcellera Biologics, you can compare the effects of market volatilities on Freedom Holding and Abcellera Biologics 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 Holding with a short position of Abcellera Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freedom Holding and Abcellera Biologics.
Diversification Opportunities for Freedom Holding and Abcellera Biologics
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Freedom and Abcellera is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Holding Corp and Abcellera Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abcellera Biologics and Freedom Holding 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 Holding Corp are associated (or correlated) with Abcellera Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abcellera Biologics has no effect on the direction of Freedom Holding i.e., Freedom Holding and Abcellera Biologics go up and down completely randomly.
Pair Corralation between Freedom Holding and Abcellera Biologics
Given the investment horizon of 90 days Freedom Holding Corp is expected to generate 0.69 times more return on investment than Abcellera Biologics. However, Freedom Holding Corp is 1.46 times less risky than Abcellera Biologics. It trades about 0.07 of its potential returns per unit of risk. Abcellera Biologics is currently generating about -0.05 per unit of risk. If you would invest 6,283 in Freedom Holding Corp on September 3, 2024 and sell it today you would earn a total of 5,664 from holding Freedom Holding Corp or generate 90.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Freedom Holding Corp vs. Abcellera Biologics
Performance |
| Timeline |
| Freedom Holding Corp |
| Abcellera Biologics |
Freedom Holding and Abcellera Biologics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freedom Holding and Abcellera Biologics
The main advantage of trading using opposite Freedom Holding and Abcellera Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freedom Holding position performs unexpectedly, Abcellera Biologics 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 Abcellera Biologics will offset losses from the drop in Abcellera Biologics' long position.| Freedom Holding vs. Riot Blockchain | Freedom Holding vs. Marathon Digital Holdings | Freedom Holding vs. Applied Blockchain | Freedom Holding vs. Hut 8 Corp |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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