Correlation Between Freedom Holding and Equinix

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

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

Diversification Opportunities for Freedom Holding and Equinix

0.31

Correlation Coefficient

Freedom Holding  Equinix

Weak diversification

The 3 months correlation between Freedom and Equinix is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Holding Corp and Equinix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equinix and Freedom Holding 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 Holding Corp are associated (or correlated) with Equinix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equinix has no effect on the direction of Freedom Holding i.e., Freedom Holding and Equinix go up and down completely randomly.

Pair Corralation between Freedom Holding and Equinix

Given the investment horizon of 90 days Freedom Holding Corp is expected to generate 1.54 times more return on investment than Equinix. However, Freedom Holding is 1.54 times more volatile than Equinix. It trades about 0.05 of its potential returns per unit of risk. Equinix is currently generating about -0.09 per unit of risk. If you would invest  12,892  in Freedom Holding Corp on December 21, 2024 and sell it today you would earn a total of  655.00  from holding Freedom Holding Corp or generate 5.08% return on investment over 90 days.

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

Freedom Holding Corp  vs.  Equinix

Freedom Holding Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Freedom Holding Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical indicators, Freedom Holding may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Equinix

Risk-Adjusted Performance

Very Weak

Over the last 90 days Equinix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Freedom Holding and Equinix

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

The idea behind Freedom Holding Corp and Equinix 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..