Correlation Between Freedom Holding and American Manganese
Can any of the company-specific risk be diversified away by investing in both Freedom Holding and American Manganese 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 American Manganese 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 American Manganese, you can compare the effects of market volatilities on Freedom Holding and American Manganese 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 American Manganese. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freedom Holding and American Manganese.
Diversification Opportunities for Freedom Holding and American Manganese
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Freedom and American is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Holding Corp and American Manganese in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Manganese 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 American Manganese. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Manganese has no effect on the direction of Freedom Holding i.e., Freedom Holding and American Manganese go up and down completely randomly.
Pair Corralation between Freedom Holding and American Manganese
Given the investment horizon of 90 days Freedom Holding is expected to generate 3.19 times less return on investment than American Manganese. But when comparing it to its historical volatility, Freedom Holding Corp is 2.97 times less risky than American Manganese. It trades about 0.19 of its potential returns per unit of risk. American Manganese is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 6.00 in American Manganese on August 23, 2024 and sell it today you would earn a total of 1.80 from holding American Manganese or generate 30.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Freedom Holding Corp vs. American Manganese
Performance |
| Timeline |
| Freedom Holding Corp |
| American Manganese |
Freedom Holding and American Manganese Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freedom Holding and American Manganese
The main advantage of trading using opposite Freedom Holding and American Manganese positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freedom Holding position performs unexpectedly, American Manganese 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 American Manganese will offset losses from the drop in American Manganese's long position.| Freedom Holding vs. Evercore Partners | Freedom Holding vs. SCOR PK | Freedom Holding vs. Aquagold International | Freedom Holding vs. Small Cap Core |
| American Manganese vs. Mundoro Capital | American Manganese vs. Norra Metals Corp | American Manganese vs. Lithium Australia NL | American Manganese vs. Ceylon Graphite Corp |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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