Correlation Between Freedom Holding and Valens
Can any of the company-specific risk be diversified away by investing in both Freedom Holding and Valens 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 Valens 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 Valens, you can compare the effects of market volatilities on Freedom Holding and Valens 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 Valens. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freedom Holding and Valens.
Diversification Opportunities for Freedom Holding and Valens
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Freedom and Valens is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Holding Corp and Valens in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valens 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 Valens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valens has no effect on the direction of Freedom Holding i.e., Freedom Holding and Valens go up and down completely randomly.
Pair Corralation between Freedom Holding and Valens
Given the investment horizon of 90 days Freedom Holding Corp is expected to generate 0.47 times more return on investment than Valens. However, Freedom Holding Corp is 2.11 times less risky than Valens. It trades about 0.28 of its potential returns per unit of risk. Valens is currently generating about -0.08 per unit of risk. If you would invest 9,476 in Freedom Holding Corp on August 30, 2024 and sell it today you would earn a total of 2,367 from holding Freedom Holding Corp or generate 24.98% 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. Valens
Performance |
| Timeline |
| Freedom Holding Corp |
| Valens |
Freedom Holding and Valens Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freedom Holding and Valens
The main advantage of trading using opposite Freedom Holding and Valens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freedom Holding position performs unexpectedly, Valens 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 Valens will offset losses from the drop in Valens' long position.| Freedom Holding vs. Nomura Holdings ADR | Freedom Holding vs. Scully Royalty | Freedom Holding vs. Oppenheimer Holdings | Freedom Holding vs. Houlihan Lokey |
| Valens vs. Wolfspeed | Valens vs. GSI Technology | Valens vs. Lattice Semiconductor | Valens vs. ON Semiconductor |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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