Correlation Between Freedom Holding and Golden Star

Can any of the company-specific risk be diversified away by investing in both Freedom Holding and Golden Star 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 Golden Star 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 Golden Star Acquisition, you can compare the effects of market volatilities on Freedom Holding and Golden Star 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 Golden Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freedom Holding and Golden Star.

Diversification Opportunities for Freedom Holding and Golden Star

0.12

Correlation Coefficient

Freedom Holding  Golden Star

Average diversification

The 3 months correlation between Freedom and Golden is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Holding Corp and Golden Star Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Star Acquisition 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 Golden Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Star Acquisition has no effect on the direction of Freedom Holding i.e., Freedom Holding and Golden Star go up and down completely randomly.

Pair Corralation between Freedom Holding and Golden Star

Given the investment horizon of 90 days Freedom Holding Corp is expected to generate 0.26 times more return on investment than Golden Star. However, Freedom Holding Corp is 3.78 times less risky than Golden Star. It trades about 0.21 of its potential returns per unit of risk. Golden Star Acquisition is currently generating about 0.02 per unit of risk. If you would invest  11,138  in Freedom Holding Corp on October 25, 2024 and sell it today you would earn a total of  2,694  from holding Freedom Holding Corp or generate 24.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Freedom Holding Corp  vs.  Golden Star Acquisition

Freedom Holding Corp

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Freedom Holding Corp are ranked lower than 16 (%) 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.

Golden Star Acquisition

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Star Acquisition are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Golden Star may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Freedom Holding and Golden Star

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

The idea behind Freedom Holding Corp and Golden Star Acquisition 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.