Correlation Between Bluerock Homes and Freedom Holding

Can any of the company-specific risk be diversified away by investing in both Bluerock Homes 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 Bluerock Homes and Freedom Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bluerock Homes Trust and Freedom Holding Corp, you can compare the effects of market volatilities on Bluerock Homes 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 Bluerock Homes with a short position of Freedom Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bluerock Homes and Freedom Holding.

Diversification Opportunities for Bluerock Homes and Freedom Holding

-0.86

Correlation Coefficient

Bluerock Homes  Freedom Holding

Pay attention - limited upside

The 3 months correlation between Bluerock and Freedom is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Bluerock Homes Trust 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 Bluerock Homes 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 Bluerock Homes Trust 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 Bluerock Homes i.e., Bluerock Homes and Freedom Holding go up and down completely randomly.

Pair Corralation between Bluerock Homes and Freedom Holding

Considering the 90-day investment horizon Bluerock Homes Trust is expected to under-perform the Freedom Holding. In addition to that, Bluerock Homes is 1.04 times more volatile than Freedom Holding Corp. It trades about -0.02 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  6,448  in Freedom Holding Corp on October 13, 2024 and sell it today you would earn a total of  6,363  from holding Freedom Holding Corp or generate 98.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Bluerock Homes Trust  vs.  Freedom Holding Corp

Bluerock Homes Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bluerock Homes Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Freedom Holding Corp

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Freedom Holding Corp are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical indicators, Freedom Holding exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bluerock Homes and Freedom Holding

The main advantage of trading using opposite Bluerock Homes and Freedom Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bluerock Homes 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.

The idea behind Bluerock Homes Trust and Freedom Holding Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.