Correlation Between Freedom Holding and Black Spade
Can any of the company-specific risk be diversified away by investing in both Freedom Holding and Black Spade 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 Black Spade 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 Black Spade Acquisition, you can compare the effects of market volatilities on Freedom Holding and Black Spade 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 Black Spade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freedom Holding and Black Spade.
Diversification Opportunities for Freedom Holding and Black Spade
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Freedom and Black is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Holding Corp and Black Spade Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Spade Acquisition 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 Black Spade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Spade Acquisition has no effect on the direction of Freedom Holding i.e., Freedom Holding and Black Spade go up and down completely randomly.
Pair Corralation between Freedom Holding and Black Spade
Given the investment horizon of 90 days Freedom Holding Corp is expected to generate 5.95 times more return on investment than Black Spade. However, Freedom Holding is 5.95 times more volatile than Black Spade Acquisition. It trades about 0.18 of its potential returns per unit of risk. Black Spade Acquisition is currently generating about 0.05 per unit of risk. If you would invest 13,069 in Freedom Holding Corp on November 1, 2024 and sell it today you would earn a total of 871.00 from holding Freedom Holding Corp or generate 6.66% 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. Black Spade Acquisition
Performance |
| Timeline |
| Freedom Holding Corp |
| Black Spade Acquisition |
Freedom Holding and Black Spade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freedom Holding and Black Spade
The main advantage of trading using opposite Freedom Holding and Black Spade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freedom Holding position performs unexpectedly, Black Spade 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 Black Spade will offset losses from the drop in Black Spade's long position.| Freedom Holding vs. Nomura Holdings ADR | Freedom Holding vs. Scully Royalty | Freedom Holding vs. Oppenheimer Holdings | Freedom Holding vs. Houlihan Lokey |
| Black Spade vs. Canaf Investments | Black Spade vs. Freedom Holding Corp | Black Spade vs. Cardinal Health | Black Spade vs. HUTCHMED DRC |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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