Correlation Between Freedom Holding and Highest Performances

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

Diversification Opportunities for Freedom Holding and Highest Performances

-0.8

Correlation Coefficient

Freedom Holding  Highest Performances

Pay attention - limited upside

The 3 months correlation between Freedom and Highest is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Holding Corp and Highest Performances Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highest Performances 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 Highest Performances. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highest Performances has no effect on the direction of Freedom Holding i.e., Freedom Holding and Highest Performances go up and down completely randomly.

Pair Corralation between Freedom Holding and Highest Performances

Given the investment horizon of 90 days Freedom Holding is expected to generate 3.34 times less return on investment than Highest Performances. But when comparing it to its historical volatility, Freedom Holding Corp is 4.44 times less risky than Highest Performances. It trades about 0.1 of its potential returns per unit of risk. Highest Performances Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  33.00  in Highest Performances Holdings on October 11, 2024 and sell it today you would earn a total of  2.00  from holding Highest Performances Holdings or generate 6.06% return on investment over 90 days.

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

Freedom Holding Corp  vs.  Highest Performances Holdings

Freedom Holding Corp

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Freedom Holding Corp are ranked lower than 22 (%) 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.

Highest Performances

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Highest Performances Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Freedom Holding and Highest Performances

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

The idea behind Freedom Holding Corp and Highest Performances Holdings 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.