Correlation Between Freedom Holding and Growth Fund
Can any of the company-specific risk be diversified away by investing in both Freedom Holding and Growth Fund 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 Growth Fund 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 Growth Fund Of, you can compare the effects of market volatilities on Freedom Holding and Growth Fund 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 Growth Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freedom Holding and Growth Fund.
Diversification Opportunities for Freedom Holding and Growth Fund
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Freedom and Growth is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Holding Corp and Growth Fund Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Fund 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 Growth Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Fund has no effect on the direction of Freedom Holding i.e., Freedom Holding and Growth Fund go up and down completely randomly.
Pair Corralation between Freedom Holding and Growth Fund
Given the investment horizon of 90 days Freedom Holding Corp is expected to generate 2.02 times more return on investment than Growth Fund. However, Freedom Holding is 2.02 times more volatile than Growth Fund Of. It trades about 0.13 of its potential returns per unit of risk. Growth Fund Of is currently generating about 0.18 per unit of risk. If you would invest 11,138 in Freedom Holding Corp on August 26, 2024 and sell it today you would earn a total of 609.00 from holding Freedom Holding Corp or generate 5.47% 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. Growth Fund Of
Performance |
| Timeline |
| Freedom Holding Corp |
| Growth Fund |
Freedom Holding and Growth Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freedom Holding and Growth Fund
The main advantage of trading using opposite Freedom Holding and Growth Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freedom Holding position performs unexpectedly, Growth Fund 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 Growth Fund will offset losses from the drop in Growth Fund's long position.| Freedom Holding vs. Nomura Holdings ADR | Freedom Holding vs. Scully Royalty | Freedom Holding vs. Oppenheimer Holdings | Freedom Holding vs. Houlihan Lokey |
| Growth Fund vs. Income Fund Of | Growth Fund vs. New World Fund | Growth Fund vs. American Mutual Fund | Growth Fund vs. American Mutual Fund |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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