Correlation Between Freedom Holding and PT Semen

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

Diversification Opportunities for Freedom Holding and PT Semen

-0.85

Correlation Coefficient

Freedom Holding  PT Semen

Pay attention - limited upside

The 3 months correlation between Freedom and PSGTF is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Holding Corp and PT Semen Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Semen Indonesia 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 PT Semen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Semen Indonesia has no effect on the direction of Freedom Holding i.e., Freedom Holding and PT Semen go up and down completely randomly.

Pair Corralation between Freedom Holding and PT Semen

If you would invest  12,924  in Freedom Holding Corp on October 11, 2024 and sell it today you would earn a total of  396.00  from holding Freedom Holding Corp or generate 3.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Freedom Holding Corp  vs.  PT Semen Indonesia

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.

PT Semen Indonesia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Semen Indonesia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Freedom Holding and PT Semen

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

The idea behind Freedom Holding Corp and PT Semen Indonesia 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.