Correlation Between Freedom Bank and Power Of

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

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

Diversification Opportunities for Freedom Bank and Power Of

0.18

Correlation Coefficient

Freedom Bank  Power Of

Average diversification

The 3 months correlation between Freedom and Power is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Bank of and Power of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Of and Freedom Bank 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 Freedom Bank of are associated (or correlated) with Power Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Of has no effect on the direction of Freedom Bank i.e., Freedom Bank and Power Of go up and down completely randomly.

Pair Corralation between Freedom Bank and Power Of

Given the investment horizon of 90 days Freedom Bank of is expected to under-perform the Power Of. In addition to that, Freedom Bank is 1.09 times more volatile than Power of. It trades about -0.05 of its total potential returns per unit of risk. Power of is currently generating about 0.08 per unit of volatility. If you would invest  2,141  in Power of on September 13, 2024 and sell it today you would earn a total of  1,125  from holding Power of or generate 52.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	81.82%
Values	Daily Returns

Freedom Bank of  vs.  Power of

Freedom Bank

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Freedom Bank of are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Freedom Bank is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Power Of

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Power of are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Power Of may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Freedom Bank and Power Of

The main advantage of trading using opposite Freedom Bank and Power Of positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freedom Bank position performs unexpectedly, Power Of 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 Power Of will offset losses from the drop in Power Of's long position.

The idea behind Freedom Bank of and Power of 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.