Correlation Between Freedom Holding and BNY Mellon
Can any of the company-specific risk be diversified away by investing in both Freedom Holding and BNY Mellon 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 BNY Mellon 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 BNY Mellon Strategic, you can compare the effects of market volatilities on Freedom Holding and BNY Mellon 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 BNY Mellon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freedom Holding and BNY Mellon.
Diversification Opportunities for Freedom Holding and BNY Mellon
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Freedom and BNY is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Holding Corp and BNY Mellon Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNY Mellon Strategic 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 BNY Mellon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNY Mellon Strategic has no effect on the direction of Freedom Holding i.e., Freedom Holding and BNY Mellon go up and down completely randomly.
Pair Corralation between Freedom Holding and BNY Mellon
Given the investment horizon of 90 days Freedom Holding Corp is expected to generate 2.58 times more return on investment than BNY Mellon. However, Freedom Holding is 2.58 times more volatile than BNY Mellon Strategic. It trades about 0.14 of its potential returns per unit of risk. BNY Mellon Strategic is currently generating about 0.31 per unit of risk. If you would invest 12,892 in Freedom Holding Corp on October 24, 2024 and sell it today you would earn a total of 571.00 from holding Freedom Holding Corp or generate 4.43% 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. BNY Mellon Strategic
Performance |
| Timeline |
| Freedom Holding Corp |
| BNY Mellon Strategic |
Freedom Holding and BNY Mellon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freedom Holding and BNY Mellon
The main advantage of trading using opposite Freedom Holding and BNY Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freedom Holding position performs unexpectedly, BNY Mellon 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 BNY Mellon will offset losses from the drop in BNY Mellon's long position.| Freedom Holding vs. Nomura Holdings ADR | Freedom Holding vs. Scully Royalty | Freedom Holding vs. Oppenheimer Holdings | Freedom Holding vs. Houlihan Lokey |
| BNY Mellon vs. Blackrock Muniholdings Closed | BNY Mellon vs. DTF Tax Free | BNY Mellon vs. John Hancock Income | BNY Mellon vs. MFS Investment Grade |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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