Correlation Between Royalty Management and Freedom Holding
Can any of the company-specific risk be diversified away by investing in both Royalty Management and Freedom Holding 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 Royalty Management and Freedom Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Royalty Management Holding and Freedom Holding Corp, you can compare the effects of market volatilities on Royalty Management and Freedom Holding 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 Royalty Management with a short position of Freedom Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Royalty Management and Freedom Holding.
Diversification Opportunities for Royalty Management and Freedom Holding
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Royalty and Freedom is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Royalty Management Holding and Freedom Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freedom Holding Corp and Royalty Management 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 Royalty Management Holding are associated (or correlated) with Freedom Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freedom Holding Corp has no effect on the direction of Royalty Management i.e., Royalty Management and Freedom Holding go up and down completely randomly.
Pair Corralation between Royalty Management and Freedom Holding
Given the investment horizon of 90 days Royalty Management Holding is expected to under-perform the Freedom Holding. In addition to that, Royalty Management is 2.55 times more volatile than Freedom Holding Corp. It trades about -0.05 of its total potential returns per unit of risk. Freedom Holding Corp is currently generating about 0.07 per unit of volatility. If you would invest 6,225 in Freedom Holding Corp on September 2, 2024 and sell it today you would earn a total of 5,663 from holding Freedom Holding Corp or generate 90.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Royalty Management Holding vs. Freedom Holding Corp
Performance |
| Timeline |
| Royalty Management |
| Freedom Holding Corp |
Royalty Management and Freedom Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Royalty Management and Freedom Holding
The main advantage of trading using opposite Royalty Management and Freedom Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Royalty Management position performs unexpectedly, Freedom Holding 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 Holding will offset losses from the drop in Freedom Holding's long position.| Royalty Management vs. Analog Devices | Royalty Management vs. Hafnia Limited | Royalty Management vs. Lindblad Expeditions Holdings | Royalty Management vs. Paysafe |
| Freedom Holding vs. Nomura Holdings ADR | Freedom Holding vs. Scully Royalty | Freedom Holding vs. Oppenheimer Holdings | Freedom Holding vs. Houlihan Lokey |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |