Correlation Between STRATSSM Certificates and Freedom Bank
Can any of the company-specific risk be diversified away by investing in both STRATSSM Certificates and Freedom Bank 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 STRATSSM Certificates and Freedom Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STRATSSM Certificates series and Freedom Bank of, you can compare the effects of market volatilities on STRATSSM Certificates and Freedom Bank 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 STRATSSM Certificates with a short position of Freedom Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of STRATSSM Certificates and Freedom Bank.
Diversification Opportunities for STRATSSM Certificates and Freedom Bank
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between STRATSSM and Freedom is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding STRATSSM Certificates series and Freedom Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freedom Bank and STRATSSM Certificates 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 STRATSSM Certificates series are associated (or correlated) with Freedom Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freedom Bank has no effect on the direction of STRATSSM Certificates i.e., STRATSSM Certificates and Freedom Bank go up and down completely randomly.
Pair Corralation between STRATSSM Certificates and Freedom Bank
If you would invest 1,022 in Freedom Bank of on September 12, 2024 and sell it today you would earn a total of 78.00 from holding Freedom Bank of or generate 7.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
STRATSSM Certificates series vs. Freedom Bank of
Performance |
| Timeline |
| STRATSSM Certificates |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Freedom Bank |
STRATSSM Certificates and Freedom Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STRATSSM Certificates and Freedom Bank
The main advantage of trading using opposite STRATSSM Certificates and Freedom Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STRATSSM Certificates position performs unexpectedly, Freedom Bank 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 Freedom Bank will offset losses from the drop in Freedom Bank's long position.| STRATSSM Certificates vs. STRATS SM Trust | STRATSSM Certificates vs. Strats SM Trust | STRATSSM Certificates vs. STRATS SM Trust | STRATSSM Certificates vs. Strats SM Trust |
| Freedom Bank vs. National Capital Bank | Freedom Bank vs. Community Heritage Financial | Freedom Bank vs. Bank of Idaho | Freedom Bank vs. Lewis Clark Bancorp |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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