Correlation Between Freedom Holding and Pfizer
Can any of the company-specific risk be diversified away by investing in both Freedom Holding and Pfizer 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 Pfizer 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 Pfizer Inc, you can compare the effects of market volatilities on Freedom Holding and Pfizer 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 Pfizer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freedom Holding and Pfizer.
Diversification Opportunities for Freedom Holding and Pfizer
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Freedom and Pfizer is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Holding Corp and Pfizer Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfizer Inc 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 Pfizer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pfizer Inc has no effect on the direction of Freedom Holding i.e., Freedom Holding and Pfizer go up and down completely randomly.
Pair Corralation between Freedom Holding and Pfizer
Given the investment horizon of 90 days Freedom Holding Corp is expected to generate 1.23 times more return on investment than Pfizer. However, Freedom Holding is 1.23 times more volatile than Pfizer Inc. It trades about 0.13 of its potential returns per unit of risk. Pfizer Inc is currently generating about 0.0 per unit of risk. If you would invest 7,675 in Freedom Holding Corp on August 23, 2024 and sell it today you would earn a total of 4,055 from holding Freedom Holding Corp or generate 52.83% 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. Pfizer Inc
Performance |
| Timeline |
| Freedom Holding Corp |
| Pfizer Inc |
Freedom Holding and Pfizer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freedom Holding and Pfizer
The main advantage of trading using opposite Freedom Holding and Pfizer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freedom Holding position performs unexpectedly, Pfizer 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 Pfizer will offset losses from the drop in Pfizer's long position.| Freedom Holding vs. Evercore Partners | Freedom Holding vs. SCOR PK | Freedom Holding vs. Aquagold International | Freedom Holding vs. Small Cap Core |
| Pfizer vs. Johnson Johnson | Pfizer vs. Small Cap Core | Pfizer vs. Freedom Holding Corp | Pfizer vs. Gfl Environmental Holdings |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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