Correlation Between Freedom Holding and Pinterest
Can any of the company-specific risk be diversified away by investing in both Freedom Holding and Pinterest 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 Pinterest 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 Pinterest, you can compare the effects of market volatilities on Freedom Holding and Pinterest 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 Pinterest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freedom Holding and Pinterest.
Diversification Opportunities for Freedom Holding and Pinterest
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Freedom and Pinterest is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Holding Corp and Pinterest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinterest 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 Pinterest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinterest has no effect on the direction of Freedom Holding i.e., Freedom Holding and Pinterest go up and down completely randomly.
Pair Corralation between Freedom Holding and Pinterest
Given the investment horizon of 90 days Freedom Holding Corp is expected to generate 0.87 times more return on investment than Pinterest. However, Freedom Holding Corp is 1.15 times less risky than Pinterest. It trades about 0.07 of its potential returns per unit of risk. Pinterest is currently generating about 0.02 per unit of risk. If you would invest 6,283 in Freedom Holding Corp on September 3, 2024 and sell it today you would earn a total of 5,664 from holding Freedom Holding Corp or generate 90.15% 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. Pinterest
Performance |
| Timeline |
| Freedom Holding Corp |
Freedom Holding and Pinterest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freedom Holding and Pinterest
The main advantage of trading using opposite Freedom Holding and Pinterest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freedom Holding position performs unexpectedly, Pinterest 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 Pinterest will offset losses from the drop in Pinterest's long position.| Freedom Holding vs. Riot Blockchain | Freedom Holding vs. Marathon Digital Holdings | Freedom Holding vs. Applied Blockchain | Freedom Holding vs. Hut 8 Corp |
| Pinterest vs. Twilio Inc | Pinterest vs. Meta Platforms | Pinterest vs. Alphabet Inc Class C | Pinterest vs. Alphabet Inc Class A |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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