Correlation Between Western Acquisition and Freedom Holding
Can any of the company-specific risk be diversified away by investing in both Western Acquisition 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 Western Acquisition and Freedom Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Acquisition Ventures and Freedom Holding Corp, you can compare the effects of market volatilities on Western Acquisition 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 Western Acquisition with a short position of Freedom Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Acquisition and Freedom Holding.
Diversification Opportunities for Western Acquisition and Freedom Holding
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and Freedom is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Western Acquisition Ventures 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 Western Acquisition 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 Western Acquisition Ventures 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 Western Acquisition i.e., Western Acquisition and Freedom Holding go up and down completely randomly.
Pair Corralation between Western Acquisition and Freedom Holding
Given the investment horizon of 90 days Western Acquisition Ventures is expected to under-perform the Freedom Holding. In addition to that, Western Acquisition is 1.05 times more volatile than Freedom Holding Corp. It trades about -0.17 of its total potential returns per unit of risk. Freedom Holding Corp is currently generating about 0.15 per unit of volatility. If you would invest 11,100 in Freedom Holding Corp on August 28, 2024 and sell it today you would earn a total of 710.00 from holding Freedom Holding Corp or generate 6.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Western Acquisition Ventures vs. Freedom Holding Corp
Performance |
| Timeline |
| Western Acquisition |
| Freedom Holding Corp |
Western Acquisition and Freedom Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Acquisition and Freedom Holding
The main advantage of trading using opposite Western Acquisition and Freedom Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Acquisition 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.| Western Acquisition vs. PowerUp Acquisition Corp | Western Acquisition vs. Aurora Innovation | Western Acquisition vs. HUMANA INC | Western Acquisition vs. Aquagold International |
| Freedom Holding vs. Visa Class A | Freedom Holding vs. Diamond Hill Investment | Freedom Holding vs. Distoken Acquisition | Freedom Holding vs. AllianceBernstein Holding LP |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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