Correlation Between Freedom Holding and Carlyle
Can any of the company-specific risk be diversified away by investing in both Freedom Holding and Carlyle 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 Carlyle 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 Carlyle Group, you can compare the effects of market volatilities on Freedom Holding and Carlyle 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 Carlyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freedom Holding and Carlyle.
Diversification Opportunities for Freedom Holding and Carlyle
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Freedom and Carlyle is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Holding Corp and Carlyle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle Group 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 Carlyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlyle Group has no effect on the direction of Freedom Holding i.e., Freedom Holding and Carlyle go up and down completely randomly.
Pair Corralation between Freedom Holding and Carlyle
Given the investment horizon of 90 days Freedom Holding is expected to generate 1.33 times less return on investment than Carlyle. But when comparing it to its historical volatility, Freedom Holding Corp is 1.22 times less risky than Carlyle. It trades about 0.09 of its potential returns per unit of risk. Carlyle Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,322 in Carlyle Group on August 26, 2024 and sell it today you would earn a total of 2,043 from holding Carlyle Group or generate 61.5% 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. Carlyle Group
Performance |
| Timeline |
| Freedom Holding Corp |
| Carlyle Group |
Freedom Holding and Carlyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freedom Holding and Carlyle
The main advantage of trading using opposite Freedom Holding and Carlyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freedom Holding position performs unexpectedly, Carlyle 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 Carlyle will offset losses from the drop in Carlyle's long position.| Freedom Holding vs. Nomura Holdings ADR | Freedom Holding vs. Scully Royalty | Freedom Holding vs. Oppenheimer Holdings | Freedom Holding vs. Houlihan Lokey |
| Carlyle vs. PowerUp Acquisition Corp | Carlyle vs. Aurora Innovation | Carlyle vs. HUMANA INC | Carlyle vs. Aquagold International |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |