Correlation Between Freedom Holding and Shimmick Common

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

Diversification Opportunities for Freedom Holding and Shimmick Common

-0.12

Correlation Coefficient

Freedom Holding  Shimmick Common

Good diversification

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

Pair Corralation between Freedom Holding and Shimmick Common

Given the investment horizon of 90 days Freedom Holding Corp is expected to generate 0.56 times more return on investment than Shimmick Common. However, Freedom Holding Corp is 1.79 times less risky than Shimmick Common. It trades about 0.05 of its potential returns per unit of risk. Shimmick Common is currently generating about -0.16 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 Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Freedom Holding Corp  vs.  Shimmick Common

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.

Shimmick Common

Risk-Adjusted Performance

Very Weak

Over the last 90 days Shimmick Common has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Freedom Holding and Shimmick Common

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

The idea behind Freedom Holding Corp and Shimmick Common 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.