Correlation Between Freedom Holding and Globalfoundries
Can any of the company-specific risk be diversified away by investing in both Freedom Holding and Globalfoundries 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 Globalfoundries 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 Globalfoundries, you can compare the effects of market volatilities on Freedom Holding and Globalfoundries 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 Globalfoundries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freedom Holding and Globalfoundries.
Diversification Opportunities for Freedom Holding and Globalfoundries
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Freedom and Globalfoundries is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Holding Corp and Globalfoundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globalfoundries 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 Globalfoundries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globalfoundries has no effect on the direction of Freedom Holding i.e., Freedom Holding and Globalfoundries go up and down completely randomly.
Pair Corralation between Freedom Holding and Globalfoundries
Given the investment horizon of 90 days Freedom Holding Corp is expected to generate 0.67 times more return on investment than Globalfoundries. However, Freedom Holding Corp is 1.5 times less risky than Globalfoundries. It trades about 0.09 of its potential returns per unit of risk. Globalfoundries is currently generating about -0.02 per unit of risk. If you would invest 8,141 in Freedom Holding Corp on August 26, 2024 and sell it today you would earn a total of 3,606 from holding Freedom Holding Corp or generate 44.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Freedom Holding Corp vs. Globalfoundries
Performance |
| Timeline |
| Freedom Holding Corp |
| Globalfoundries |
Freedom Holding and Globalfoundries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freedom Holding and Globalfoundries
The main advantage of trading using opposite Freedom Holding and Globalfoundries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freedom Holding position performs unexpectedly, Globalfoundries 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 Globalfoundries will offset losses from the drop in Globalfoundries' long position.| Freedom Holding vs. Nomura Holdings ADR | Freedom Holding vs. Scully Royalty | Freedom Holding vs. Oppenheimer Holdings | Freedom Holding vs. Houlihan Lokey |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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