Correlation Between Blackstone and Freedom Holding

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

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

Diversification Opportunities for Blackstone and Freedom Holding

-0.65

Correlation Coefficient

Blackstone  Freedom Holding

Excellent diversification

The 3 months correlation between Blackstone and Freedom is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group 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 Blackstone 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 Blackstone Group 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 Blackstone i.e., Blackstone and Freedom Holding go up and down completely randomly.

Pair Corralation between Blackstone and Freedom Holding

Allowing for the 90-day total investment horizon Blackstone Group is expected to under-perform the Freedom Holding. But the stock apears to be less risky and, when comparing its historical volatility, Blackstone Group is 1.15 times less risky than Freedom Holding. The stock trades about -0.16 of its potential returns per unit of risk. The Freedom Holding Corp is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  11,888  in Freedom Holding Corp on November 28, 2024 and sell it today you would earn a total of  2,653  from holding Freedom Holding Corp or generate 22.32% return on investment over 90 days.

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

Blackstone Group  vs.  Freedom Holding Corp

Blackstone Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blackstone Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Freedom Holding Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Freedom Holding Corp are ranked lower than 13 (%) 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 Blackstone and Freedom Holding

The main advantage of trading using opposite Blackstone and Freedom Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackstone 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 Blackstone Group 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.