Correlation Between Freedom Holding and Stifel Financial
Can any of the company-specific risk be diversified away by investing in both Freedom Holding and Stifel Financial 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 Stifel Financial 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 Stifel Financial Corp, you can compare the effects of market volatilities on Freedom Holding and Stifel Financial 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 Stifel Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freedom Holding and Stifel Financial.
Diversification Opportunities for Freedom Holding and Stifel Financial
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Freedom and Stifel is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Holding Corp and Stifel Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stifel Financial Corp 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 Stifel Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stifel Financial Corp has no effect on the direction of Freedom Holding i.e., Freedom Holding and Stifel Financial go up and down completely randomly.
Pair Corralation between Freedom Holding and Stifel Financial
Given the investment horizon of 90 days Freedom Holding Corp is expected to generate 2.29 times more return on investment than Stifel Financial. However, Freedom Holding is 2.29 times more volatile than Stifel Financial Corp. It trades about 0.26 of its potential returns per unit of risk. Stifel Financial Corp is currently generating about 0.0 per unit of risk. If you would invest 8,917 in Freedom Holding Corp on August 31, 2024 and sell it today you would earn a total of 2,926 from holding Freedom Holding Corp or generate 32.81% 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. Stifel Financial Corp
Performance |
| Timeline |
| Freedom Holding Corp |
| Stifel Financial Corp |
Freedom Holding and Stifel Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freedom Holding and Stifel Financial
The main advantage of trading using opposite Freedom Holding and Stifel Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freedom Holding position performs unexpectedly, Stifel Financial 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 Stifel Financial will offset losses from the drop in Stifel Financial's long position.| Freedom Holding vs. Nomura Holdings ADR | Freedom Holding vs. Scully Royalty | Freedom Holding vs. Oppenheimer Holdings | Freedom Holding vs. Houlihan Lokey |
| Stifel Financial vs. Q2 Holdings | Stifel Financial vs. United Airlines Holdings | Stifel Financial vs. Verra Mobility Corp | Stifel Financial vs. Proficient Auto Logistics, |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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