Correlation Between Freedom Holding and Montana Technologies
Can any of the company-specific risk be diversified away by investing in both Freedom Holding and Montana Technologies 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 Montana Technologies 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 Montana Technologies, you can compare the effects of market volatilities on Freedom Holding and Montana Technologies 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 Montana Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freedom Holding and Montana Technologies.
Diversification Opportunities for Freedom Holding and Montana Technologies
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Freedom and Montana is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Holding Corp and Montana Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Montana Technologies 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 Montana Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Montana Technologies has no effect on the direction of Freedom Holding i.e., Freedom Holding and Montana Technologies go up and down completely randomly.
Pair Corralation between Freedom Holding and Montana Technologies
Given the investment horizon of 90 days Freedom Holding Corp is expected to generate 0.28 times more return on investment than Montana Technologies. However, Freedom Holding Corp is 3.61 times less risky than Montana Technologies. It trades about 0.14 of its potential returns per unit of risk. Montana Technologies is currently generating about -0.03 per unit of risk. If you would invest 12,892 in Freedom Holding Corp on October 23, 2024 and sell it today you would earn a total of 597.00 from holding Freedom Holding Corp or generate 4.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Freedom Holding Corp vs. Montana Technologies
Performance |
| Timeline |
| Freedom Holding Corp |
| Montana Technologies |
Freedom Holding and Montana Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freedom Holding and Montana Technologies
The main advantage of trading using opposite Freedom Holding and Montana Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freedom Holding position performs unexpectedly, Montana Technologies 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 Montana Technologies will offset losses from the drop in Montana Technologies' long position.| Freedom Holding vs. Nomura Holdings ADR | Freedom Holding vs. Scully Royalty | Freedom Holding vs. Oppenheimer Holdings | Freedom Holding vs. Houlihan Lokey |
| Montana Technologies vs. FitLife Brands, Common | Montana Technologies vs. Grocery Outlet Holding | Montana Technologies vs. United Parks Resorts | Montana Technologies vs. Emerson Radio |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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