Correlation Between Freedom Holding and Broadstone Net
Can any of the company-specific risk be diversified away by investing in both Freedom Holding and Broadstone Net 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 Broadstone Net 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 Broadstone Net Lease, you can compare the effects of market volatilities on Freedom Holding and Broadstone Net 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 Broadstone Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freedom Holding and Broadstone Net.
Diversification Opportunities for Freedom Holding and Broadstone Net
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Freedom and Broadstone is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Holding Corp and Broadstone Net Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broadstone Net Lease 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 Broadstone Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broadstone Net Lease has no effect on the direction of Freedom Holding i.e., Freedom Holding and Broadstone Net go up and down completely randomly.
Pair Corralation between Freedom Holding and Broadstone Net
Given the investment horizon of 90 days Freedom Holding Corp is expected to generate 1.93 times more return on investment than Broadstone Net. However, Freedom Holding is 1.93 times more volatile than Broadstone Net Lease. It trades about 0.16 of its potential returns per unit of risk. Broadstone Net Lease is currently generating about -0.14 per unit of risk. If you would invest 11,107 in Freedom Holding Corp on August 31, 2024 and sell it today you would earn a total of 781.00 from holding Freedom Holding Corp or generate 7.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Freedom Holding Corp vs. Broadstone Net Lease
Performance |
| Timeline |
| Freedom Holding Corp |
| Broadstone Net Lease |
Freedom Holding and Broadstone Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freedom Holding and Broadstone Net
The main advantage of trading using opposite Freedom Holding and Broadstone Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freedom Holding position performs unexpectedly, Broadstone Net 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 Broadstone Net will offset losses from the drop in Broadstone Net's long position.| Freedom Holding vs. Nomura Holdings ADR | Freedom Holding vs. Scully Royalty | Freedom Holding vs. Oppenheimer Holdings | Freedom Holding vs. Houlihan Lokey |
| Broadstone Net vs. Armada Hflr Pr | Broadstone Net vs. Brightspire Capital | Broadstone Net vs. Safehold | Broadstone Net vs. Essential Properties Realty |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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