Correlation Between Valens and Freedom Holding
Can any of the company-specific risk be diversified away by investing in both Valens 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 Valens and Freedom Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valens and Freedom Holding Corp, you can compare the effects of market volatilities on Valens 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 Valens with a short position of Freedom Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valens and Freedom Holding.
Diversification Opportunities for Valens and Freedom Holding
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Valens and Freedom is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Valens 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 Valens 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 Valens 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 Valens i.e., Valens and Freedom Holding go up and down completely randomly.
Pair Corralation between Valens and Freedom Holding
Considering the 90-day investment horizon Valens is expected to under-perform the Freedom Holding. In addition to that, Valens is 2.11 times more volatile than Freedom Holding Corp. It trades about -0.08 of its total potential returns per unit of risk. Freedom Holding Corp is currently generating about 0.28 per unit of volatility. 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 |
Valens vs. Freedom Holding Corp
Performance |
| Timeline |
| Valens |
| Freedom Holding Corp |
Valens and Freedom Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valens and Freedom Holding
The main advantage of trading using opposite Valens and Freedom Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valens 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.| Valens vs. Wolfspeed | Valens vs. GSI Technology | Valens vs. Lattice Semiconductor | Valens vs. ON Semiconductor |
| 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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