Correlation Between Freedom Holding and 360 Finance
Can any of the company-specific risk be diversified away by investing in both Freedom Holding and 360 Finance 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 360 Finance 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 360 Finance, you can compare the effects of market volatilities on Freedom Holding and 360 Finance 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 360 Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freedom Holding and 360 Finance.
Diversification Opportunities for Freedom Holding and 360 Finance
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Freedom and 360 is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Holding Corp and 360 Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 360 Finance 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 360 Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 360 Finance has no effect on the direction of Freedom Holding i.e., Freedom Holding and 360 Finance go up and down completely randomly.
Pair Corralation between Freedom Holding and 360 Finance
Given the investment horizon of 90 days Freedom Holding Corp is expected to generate 0.79 times more return on investment than 360 Finance. However, Freedom Holding Corp is 1.27 times less risky than 360 Finance. It trades about 0.08 of its potential returns per unit of risk. 360 Finance is currently generating about 0.06 per unit of risk. If you would invest 6,338 in Freedom Holding Corp on November 5, 2024 and sell it today you would earn a total of 7,746 from holding Freedom Holding Corp or generate 122.22% 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. 360 Finance
Performance |
| Timeline |
| Freedom Holding Corp |
| 360 Finance |
Freedom Holding and 360 Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freedom Holding and 360 Finance
The main advantage of trading using opposite Freedom Holding and 360 Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freedom Holding position performs unexpectedly, 360 Finance 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 360 Finance will offset losses from the drop in 360 Finance's long position.| Freedom Holding vs. Nomura Holdings ADR | Freedom Holding vs. Scully Royalty | Freedom Holding vs. Oppenheimer Holdings | Freedom Holding vs. Houlihan Lokey |
| 360 Finance vs. Warner Music Group | 360 Finance vs. Tencent Music Entertainment | 360 Finance vs. I Mab | 360 Finance vs. Zoom Video Communications |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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