Correlation Between Freedom Holding and Yamaha Corp
Can any of the company-specific risk be diversified away by investing in both Freedom Holding and Yamaha Corp 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 Yamaha Corp 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 Yamaha Corp DRC, you can compare the effects of market volatilities on Freedom Holding and Yamaha Corp 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 Yamaha Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freedom Holding and Yamaha Corp.
Diversification Opportunities for Freedom Holding and Yamaha Corp
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Freedom and Yamaha is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Holding Corp and Yamaha Corp DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yamaha Corp DRC 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 Yamaha Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yamaha Corp DRC has no effect on the direction of Freedom Holding i.e., Freedom Holding and Yamaha Corp go up and down completely randomly.
Pair Corralation between Freedom Holding and Yamaha Corp
Given the investment horizon of 90 days Freedom Holding Corp is expected to generate 0.72 times more return on investment than Yamaha Corp. However, Freedom Holding Corp is 1.38 times less risky than Yamaha Corp. It trades about 0.14 of its potential returns per unit of risk. Yamaha Corp DRC is currently generating about -0.24 per unit of risk. If you would invest 11,100 in Freedom Holding Corp on August 27, 2024 and sell it today you would earn a total of 647.00 from holding Freedom Holding Corp or generate 5.83% 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. Yamaha Corp DRC
Performance |
| Timeline |
| Freedom Holding Corp |
| Yamaha Corp DRC |
Freedom Holding and Yamaha Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freedom Holding and Yamaha Corp
The main advantage of trading using opposite Freedom Holding and Yamaha Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freedom Holding position performs unexpectedly, Yamaha Corp 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 Yamaha Corp will offset losses from the drop in Yamaha Corp's long position.| Freedom Holding vs. Nomura Holdings ADR | Freedom Holding vs. Scully Royalty | Freedom Holding vs. Oppenheimer Holdings | Freedom Holding vs. Houlihan Lokey |
| Yamaha Corp vs. Shimano | Yamaha Corp vs. BANDAI NAMCO Holdings | Yamaha Corp vs. BANDAI NAMCO Holdings | Yamaha Corp vs. Nikon Corp |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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