Correlation Between Freedom Holding and Transocean
Can any of the company-specific risk be diversified away by investing in both Freedom Holding and Transocean 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 Transocean 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 Transocean, you can compare the effects of market volatilities on Freedom Holding and Transocean 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 Transocean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freedom Holding and Transocean.
Diversification Opportunities for Freedom Holding and Transocean
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Freedom and Transocean is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Holding Corp and Transocean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transocean 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 Transocean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transocean has no effect on the direction of Freedom Holding i.e., Freedom Holding and Transocean go up and down completely randomly.
Pair Corralation between Freedom Holding and Transocean
Given the investment horizon of 90 days Freedom Holding Corp is expected to generate 0.79 times more return on investment than Transocean. However, Freedom Holding Corp is 1.26 times less risky than Transocean. It trades about 0.07 of its potential returns per unit of risk. Transocean is currently generating about -0.06 per unit of risk. If you would invest 8,078 in Freedom Holding Corp on September 12, 2024 and sell it today you would earn a total of 4,846 from holding Freedom Holding Corp or generate 59.99% 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. Transocean
Performance |
| Timeline |
| Freedom Holding Corp |
| Transocean |
Freedom Holding and Transocean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freedom Holding and Transocean
The main advantage of trading using opposite Freedom Holding and Transocean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freedom Holding position performs unexpectedly, Transocean 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 Transocean will offset losses from the drop in Transocean's long position.| Freedom Holding vs. Scully Royalty | Freedom Holding vs. Oppenheimer Holdings | Freedom Holding vs. Houlihan Lokey | Freedom Holding vs. Stonex Group |
| Transocean vs. Valneva SE ADR | Transocean vs. Summit Hotel Properties | Transocean vs. Freedom Holding Corp | Transocean vs. Uber Technologies |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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